It's two different dynamics - you have the parent/child dynamic with your daughter. Your SM has the grandparent/grandchild dynamic with your niece. Total opposites!
As grandparents, yes, we spoil our grandchildren. I think it's our job, right? I have kind of a similar situation. I raise my GD, L. My SS lives with us an brings his daughter, another of my GD's, H, to visit every weekend. Now, while I may let H eat junk rather than dinner, I don't want L to. With L, I am the mom so I do the mom thing - healthy food, etc. With H, I'm the grandma who gets to spoil her so I may let her get away with a bit more. L understands this dynamic - I've actually explained it to her. I tell her I'm looking out for her future like a parent, but I'm only in it to spoil H as her parents are the ones looking out for her future. L understands and it's not a huge difference between the two and L know how much I love her and consider her to be the "perfect" child while we both know H has her issues!
It works for us. But all this to say, there are two different dynamics at play and they aren't comparable.
FYI, now you know what your LO is getting away with when he's at your dad's!