To me, there's a big difference between whether your boyfriend is "out" to his family, and whether he's lying about your relationship status.
Personally, I can't tolerate being someone's dirty little secret. If I had a partner who had chosen not to come out to his family, then I would decline to go to family functions with him being introduced as "just a friend."
Coming out to his family is his business, but being introduced as a friend is your business. Is it possible this is what's bothering you? In other words, that her level of intimacy with you was more appropriate towards a friend of her son rather than his girlfriend?
So if it were me, it's not the awkwardness with the in-laws that I would sit out, since I honestly believe awkwardness with in-laws comes with the territory, but rather the "just friends" status as a guest of your boyfriend.
My mother-in-law hated my guts and made no secrets about it. From my blue hair to my alleged theft of her son from her talons, she just did not like me. She swore we'd get married over her dead body. A year later, she was in fact dead. A year after that, we were in fact married. Oh, the irony. But Christmas with his family was important to my husband, and I wanted to be with him for the holidays, so I came up. Actually, I think he hated the gatherings as much as I did, but he hated her guilt trips even worse.
Family is a double-edged sword. On the one hand, they're family. On the other hand, they're family. The obligations, the love, the togetherness, the bitterness, the stories, the memories good and bad. I mean, it's one day, so if it's just the awkwardness that bothers you, I would suck it up and make your own fun. If it's the having to hide your status, then I would tell my boyfriend that it bothers me to be introduced with a reduced level of importance than you actually have. If it's important enough to him for you to be there, then it should also be important enough for him to sit down with his family a week before the main event and get everything out into the open.
“As I am sure any cat owner will be able to tell you,
someone else putting you in a box is entirely different
from getting into a box yourself.” —bisexualbaker