You said your parents love your husband. Your mother apologized to him and feels awful for the rift. This shows me they do care for and respect him.

The way they tease him sounds to me like they think it’s funny. They know he’s intelligent as he’s a PhD. They tease him about not being smart because in truth they are intimidated by his intelligence. It sounds like this is their sense of humor style and they thought he’s laugh along.

When you made a no politics rule, and they refused to respect that, that was bad on them. They should have respected your boundary. These issues were always a problem for people to discuss their differences of opinion. At this time in history, families are being torn apart left and right (pun intended )

It sounds like they are good parents and you are close aside from this issue.

I feel for your husband’s pain of not being able to stop their treatment of him that was disrespectful.

From the things you mentioned they said and did, they don’t sound like hateful racists, only sometimes uninformed. I didn’t know Hispanic was offensive tbh. But, when he told them he prefers Latino, they should respect him and refer to him as Latino. Or is it offensive to refer to someone’s race at all now?

Other things you mentioned they said are not racist. They are just other things that sound like they enjoy poking fun in what they don’t think is offensive (but it is to you both).

In past decades, fun being poked at others was acceptable. It’s not anymore. I’m not talking about really mean spirited. Just people would laugh at themselves more.

Your parents obviously approved of him, as you married him, and they supported and embraced it.

I hope you can all work it out and remain a loving family. Look at intentions. Try to communicate and be heard and respected. If you parents know they are driving you away, I hope they will learn to respect boundaries.