C.M.
Erratic and combative personality changes are common with Alzheimers. So is paranoia (has she had any of this??)
No, I wouldn't leave your children unattended with her. But frankly, I would be most worried about her driving. I would take her car and just tell her you needed to take it for service...then keep making up reasons why the car has come back from the shop.
You really need to sit down with your husband. Once he comes to his senses, you should call and speak with her doctor. Call him without her knowledge and express your concern; outline her behavior and request that she be evaluated. They can conduct mental aptitude tests and hopefully refer her to a specialist, if needed.
My MIL was diagnosed 2 years ago and has recently been moved to a care facility because she progressed so rapidly.
Your family will be in my prayers.