If it doesn't work for you, it's totally okay to decline, or figure out how to make it work for your family, and not make your children's bath routine my responsibility.
The problem with family birthdays etc is that it's often *not* totally fine for people to decline. Even if it was fine from the OP and her husband's point of view, it sounds like there's pressure from OP's parents-in-law to invite the other family, so they're probably being pressured as well to attend for the sake of family.
It is totally fine to decline. There may be anger and resentment, and there may be backlash, but it's fine to decline. It's up to the individuals to decide where they want to go and where their boundaries are and accept whatever consequences happen as a result. If some family member gets that angry that an individual chooses not to participate in a party that requires eight hours of their day, a hefty amount of this being travel and drive time, the expense of travel, and they have to be at work in the morning, plus deal with the care of tiny humans who cannot deal with activities of daily living on their own yet, and they have to be ready for school or daycare, why would anyone would want to continue this relation-ship? The phrases that come to mind are "deal with it or die mad" and "not my circus, not my monkeys." It is okay to decline an invitation.
And yet, if you can go to an event that you would otherwise enjoy and your family would enjoy if you can have one little accommodation of 15 to 20 minutes to bathe your kids and put them to sleep before you leave, then why not consider that? Like a PP said, the OP and her DH aren't really making anything easy for BIL and SIL. If they decline the visit because it doesn't meet with their family schedule, DH gets mad at them. But the OP doesn't want to accommodate the one thing that would make these visits possible.
Sure, it's the OP's house and she can do whatever she wants. But it's also DH's house and he gets a say too. So, if he gets upset when they decline, then he and the OP should figure out a way to make it easier for them. Baths seem easy. But moving the times, locations, etc would also work.
So, basically, while you are completely right that it's both ok to decline an invitation and it's ok for the OP to refuse any offer of hospitality above and beyond the visit and food, it seems to me that everyone exercising their rights to do what they want simply because they want to, doesn't really bode well for family relationships
, does it? Having a discussion on etiquette by strictly stating the "rules" is fine, but I don't think it helps the situation get better. What helps the situation get better would be for the OP to figure out why
this bothers her and address that, talk to her husband about what he prefers with these visits, and even talk to BIL and SIL to see if something else (like meeting at their house) would be easier for them.