OP, here's some perspective:

I was raised in a Roman Catholic Household. My mother was- and still is- pretty severely religious. If I stubbed my toe or broke a toy, God was punishing me for my wrong doings- even if I hadn't done anything wrong.

A lot of crap contributed to me being pretty mentally ill, not just my upbringing, but I developed scrupulosity and I think it came from my parents. I had something of a psychotic break in Highschool where I spent all night rocking back and forth mumbling "I love Jesus" over and over and over because I was absolutely convinced I was possessed by the Devil.

I imagine you would say aside from this thing, your in laws are wonderful with your daughter- however this one thing can be damaging. I am not a Doctor and I speak only from my own experiences.

Honestly, if it were me and it was my Daughter terrified of Satan, I would take the route of explaining to her that Satan doesn't exist and that karma punishment for things like watching movies isn't real. If you still want the kiddo to see the in-laws, I would be absolutely certain that the kid stands up to Grandma and Grandpa by telling them that they can't say those things to her, she doesn't like it, and she can call mom and dad to come get her at any time.

I know not everyone can afford court fees, so maybe if they do take you to court try and shame them into dropping whatever they bring against you. "Oh, daughter doesn't see grandparents anymore because they were absolutely terrifying her with their religious talk, but they would rather continue to scare her and are now fighting us to let them do so. We just want our kid to be happy, it's too bad grandparents aren't on the same page."