Guest list drama

I'm with PP's. I would invite her, as an olive branch of good will, and if she decides not to come oh well. And I wouldn't invite people who aren't family just because she demands it. No pay, no say.

It is your fh family- you should have let him deal with it from the start - but now i dont think you should force him to drop people off his side

I think both of you were out of place to be honest. She has no right to tell you who you should and should not invite to your wedding; and you should have handed the phone over to your FH. I would still invite her since your FH wants her there and she can make the choice whether or not she will attend.

Extend her the invitation. Family friends are cut from guests lists often, its normal. If you can't host them, thats it. She should understand that. Just send her the invitation and its her choice to decline or not. Odds are she will come around by the time of the wedding!

Also, I would hate the awkwardness in the future if I did not send her an invite!

I feel like in this case if you uninvite her there will definitely be tension for the rest of your married life when it comes to family gatherings. Also if FH wants her there then she should be there. However if she tries bullying you into inviting her people by threatening to not come - and you've already explained how you would love everyone to be there, but have a realistic budget you need to stick to - I would respond with "We are sorry you feel that way and would love for you to celebrate with us, but if that's the decision you want to make, then we will just have to accept that," id even say it with a big old smile on my face. We've had some issues like this with my own MIL telling her son she wouldn't go if x y and z come or if we don't invite a b and c from her side and we initially caved, but given we are most likely going to have to cut our list bc of covid and will cut the people we did not put on originally first, that will be my new go to if she tries using the fine I won't come line.