Your Mother-in-Law's feelings are far more important than what bag you carry.
Carry the bag around her and be proud you have a relative who thinks of you in such a way. She tried to please you. Those into bags know it is extremely hard to pick a bag for someone else, almost impossible. Those NOT into bag are unaware of this issue. She tried and love her for that. There is no need to tell anyone, not even your husband, that you do not like the bag. It's just a bag.
Family is what makes this world go around. A bag will not take care of you when you are sick, support you in times of need and love you for your contribution to the family.
Carry that bag for what it represents....family love.