You wanted us to let you know what we think, so I'm responding even though you have already received some good thoughts. I had a MIL and am now a MIL so have lived on both ends of the spectrum.
When first married to an only son, my MIL was hugely possessive of him and told me not to touch anything that was his. I took that under advisement but let her know quietly that we were now married and both his things and mine were to be determined jointly. Began our marriage with the son & his parents making decisions about our life without my knowing about it until later. I discussed this with him privately. Stayed respectful but alert to my in-laws.
Because of this early difficulty, I learned that the best way to be a mother is to be even kinder to the DIL than your own son...this keeps all lives much smoother. However, your ex-MIL hasn't learned that lesson yet, & sounds tough enough that she might never learn it. Your ex is trying to soft-pedal her to keep her rantings under control. He has no choice other than she is his mother, and to his credit he is trying to remain a respectful son (even if his omissions unexpectedly reach your eyes.) I would give him loose slack on that one - sounds like his life hasn't been easy with your ex-MIL guiding him by her strong hand through his growing-up period.
No DIL would be suitable for him, in her eyes. That's a "given" for anyone he might choose. I think the best solution is just to side-step her without making a major issue of her absolutely stupid suggestions to him or his trying to avoid confrontations with her.
If you enjoy his company, enjoy it, and especially if your children do too.
If he enjoys your company, great. (His mother is his problem - not yours - you're an ex)
My personal opinion is that a strong friendship between your ex & yourself might be the better way to go forward as long as his mother is anywhere in the picture and the dominant person she has forced herself to be in his life. Just sidestep her.
Whether or not he decides to distance himself from her is totally his choice. I would stay out of that decision 100%. (Otherwise, she'll taint it that it was all your fault, which she might anyway, but at least he would know better.)
I also agree with others that your first priority is to continue to love & support your two children as they are going through their growing-up years. Adolescence is turbulence enough for them. They have already lived through the heartbreak of a split home.
The good outcome is that you know how NOT EVER to act as a MIL!
God bless you, Lynda.
M. T