In the specific example here, I don't see a problem. I'm not sure an under 5 would notice that one doll was brand name and the other wasn't, or know that one doll cost more than the other, and the MIL plans to give the same kind of doll to the other girls at the same age.
Deciding to make it all dolls is a bit odd, admittedly.
In the general sense - I do think gifting in a family (like to all the kids, or all the grandkids) needs to be kept reasonably fair. That doesn't mean exactly fair - like the same number of gifts, or identical dollar amounts, but rather that it shouldn't be obvious that one child is getting much better gifts than another.
The idea that things balance out over time works if it really does balance over time (ie, not being used as an excuse), and, importantly, that the recipients are able to understand this. Adults can should be able to adapt to year to year variations. Kids, on the other hand, are a lot less able to process "Last year you got lots of presents and your sister didn't get many, so this year she gets lots and you don't get much", (a year is a long time for a kid), and they aren't as good at hiding hurt feelings at the time.