He chose to prioritize your mom over yours just cos she has paid for a small engagement party that neither of you wanted her to pay for. She makes rude comments to insult you, even in front of others, and being toxic. Who is to say she won't make these comments to the guests at the party and ruin your own emotional health during YOUR engagement. But hey, to your partner, that doesn't matter cos his mom has thrown in some money. That's a red flag.

Just offer to refund (pay venue & caterers directly then they refund your mom) cos it's unclear if she has actually paid any venue or just said that to avoid being dis-invited. It's odd how she never consulted with you and you fiance about the your engagement party arrangements.