I'm not sure where I'm going with this so bear with me. Tolerance of racism is acceptance of racism and frankly encouragement of it. If your SO cant stand with you on this, there is a problem.

However, I would also say that if you don't have the energy to calmly educate and interact with his niece through social media in response to her racist posts, then it's fine to just ignore it. It's also fine to keep your contact limited with her. And by ignore it, I actually mean blocking her, not just unfollowing. I believe that you have to show you will not tolerate racism and by blocking her you will be doing so.

If the family has a problem you can simply say "Niece posts racist things and I dont want to see that so I've blocked her. If she wants to reconsider what she posts then maybe we can interact on social media again. But just as she is free to post, I am free to keep my feed free from racism."

You can't fix everyone's messed up thinking. Some people have to be dragged along kicking and screaming.