Hi. Sounds like you have great intentions from your in-laws. :) Here is my story of potty training. My oldest son wouldn't potty train for anything. We took him to the store and let him choose his prizes for the prize bucket that we had on the back of the toilet. We had a sticker chart. Every time he would go we made such a big deal about it, praise, dancing singing, stickers on the chart a prize from the bucket. If he went pee he got one sticker, poop was worth 2. when he got 5 stickers he got a prize from the bucket. This worked out to be a "big" prize every day. my younger son was very excited and tried his hardest, but since he is a year and half younger than my oldest I was not really concerned about him. My neighbor actually ended up taking him to her house everyday for a week, as I became sick and on bed rest with my last pregnancy...longer story... Her daughter became potty trained during that time, but my son would not. He was so stubborn!
Finally I just told him, "Next week you will be four years old. If you can't go on the potty you will have to wear diapers. I have never met a four year old that wears diapers. You need to do this. Four year olds don't wear diapers." He started going all the time, never had one single accident, not even in bed. He just need to know that it was expected of him and it was okay. He didn't want the attention. He preferred his privacy. Who knew it could be so simple?
Sounds like your boy has some fears, and possibly too much pressure from other sources. I would try taking some one on one time with him and just tell him like it is. Good luck!