If you really dont't feel comfortable confronting your sis-in-law then I would suggest you correct baby (actually correcting your sister In law) whenever you hear her telling your baby to call her MAMA. dont't ever wait till your child is old enough to correct him because your sister In law might think it's ok for her to do that then.
And you're definitely not possessive! Like Ting says, you been through the whole pregnancy, labour pains, etc. NOT to hear your son call someone else MAMA. I would be just as annoyed as you are if I were you.