I needed this reminder today for another situation within our extended family, so thank you.
Personally, where my own in-laws are concerned I feel that the two concepts (holding a grudge vs. setting boundaries) are not mutually exclusive
I freely admit that after so many years of BS from the in-laws, all of the cruelties and games they've played, that there are some things that go beyond the ability to forgive. There are some lines you just shouldn't cross. After years of being loathed for no reason other than the fact that I made my husband happy (and then went on to give him some beautiful children and a continued 15+ year marriage that is still going strong) I have to conclude that they actually in their "heart of hearts" (although I don't truly believe they are in touch with their hearts) wish us misery.
I DO feel pity for their inability to understand true love. I DO feel pity that they are miserable and unable to see how much they are truly blessed in life and to appreciate those blessings. I DO feel pity that they are all embroiled in a very toxic co-dependent-and-trauma-bonding relationship with one another. I really do.
But just because I feel pity for them, and some compassion (mainly because I actually am in touch with my heart) doesn't mean I can ever fully forgive them for what they've done (repeatedly) to our family.
At the same time, I have to protect my family from their toxic games.
I know that God would probably want me to forgive, and maybe one day I will truly find that place of forgiveness...but today is not that day.