Practice using your I'm The Mom And I'm Confident About What I Want Voice. That means that when you don't like what you see about how ANYONE is handling the baby ie. the baby is screaming and MIL isn't tending to her well enough to soothe the screaming and won't hand her over, then you need to step in with confidence.
"MIL, we're still making sure that everyone who holds her washes their hands first. It's just a rule we have. We make everyone do it, it's nothing personal. You remember how it was being a first time mom." And then make sure that everyone who holds her washes their hands, not just her when she's sick.
"MIL, when she cries like that I prefer calming her down right away. Let me soothe her before she starts gagging and can't be soothed at all and we end up having to leave. As soon as she's calm and sleeping again, I'll let you hold her again."
If you don't want someone who is sick to hold or kiss the baby, say so with confidence and stick to it without exceptions. Even if you don't feel confident, fake it. "I'm sorry, but we're really paranoid about the baby getting sick when she's so small. If she doesn't have to get sick at this age we would prefer to prevent it while it's possible. Thanks so much for understanding." Or as soon as you know your MIL is sick, leave her house. Cut the visit short. Don't go there. "When you're not sick any more, give us a call. None of us can afford to get sick right now. I'm sure you understand since you're sick and must feel horrible."
"The baby is resting so well right now, so I would prefer if only the adults hold her until she's older and can sit on her own." This works if she has eager cousins that want to hold their tiny cousin, and it will cut down on germs being passed around.
When you arrive somewhere: "Husband and I are just getting over Vague Illness, and the baby was so lucky not to get it. We're a little paranoid about the germs right now, so if you're sick respect our request that you hold the baby next visit."
This is your baby, meaning you don't need anyone else's permission on how to parent her. If your husband won't step in or if he's unsure and holding back, then you have to do it. Otherwise, people (not just your MIL) will run roughshod over you. I get the feeling that you're not confrontational, and I'm not either. Well, I wasn't until I had children. I've learned to pick and choose my battles with The Grands (grandparents) and pick and choose their tidbits of advice.
Sometimes their ways of doing things are perfectly fine. Sometimes there's a hill I'm willing to die on. Sometimes doing things differently is just that... doing things differently.