I think the reason why your mother-in-law acts that way is because she's unhappy. People who are happy don't feel the need to belittle others.
I dont know about her being unhappy. I actually see her as the opposite. She seems full of energy and happy all the time. She's like the life of the party in an effortless way. To be fair, I still think that her 'nasty words' are just her being mindlessly tactless. Like I mentioned before, I observed that being insensitive and boisterous seems to run in MIL's side of family. The way they joke and speak out their mind can sometimes be quite inappropriate or offensive but it's nothing to them. But for me who is not used to people like them, I can easily take their words personally. I'm not defending them though because even my hubby warned me about their kinda rough behavior. But I guess normal people will easily shrugged their words off while I seem to take them by heart.
Like in the case of MIL calling me ugly... Im pretty sure she still havent realized that she offended me. She was like messaging me on Facebook like nothing happened.... although I still havent responded to her for like several days now.
On the other hand, I also feel that MIL and MIL's family have a bit of uneasiness connecting with me. They're used to my hubby's exes who are confident and extrovert. I guess they're also clueless how to cope with me Lol.
Sometimes we'll have awkward converations like when they asked me if I drink alcohol and then I said 'not really because of their bitter taste' then there was silence and just so they wouldnt think Im boring, I quickly added "Oh but I do drink wine" and they didnt really respond enthusiastically. My husband actually thought the conversation funny because adding the 'wine' reply only made it worse because his family are beer drinkers.
His family loves watching soap operas and I dont. One time I joined them watching TV and they asked me about the character and I had to admit that I am clueless.
Those are some few instances that makes me feel like an alien. I dont blame them mind you. It's just we cant help that me and MIL's family are totally different.
Maybe you'll wonder why I mention MIL's family often. You see, MIL's side of family (the aunts, uncles, cousins, grandkids) just live nearby. They are really big family and many times my hubby's cousins hangout in their house. Whenever there's an occasion, there's always big parties dominated by MIL's relatives.
Oh well... im being random again. I better stop here lol.