There is nothing you can do. Have your SD deliver said gifts and stay out of it. If she's doing it to aggravate you, then she's got what she wanted. Don't give her that satisfaction. Tell your SD how excited her cousins will be with their surpirse gifts. 

In StepHell, you have to choose your battles. This is NOT a hill I would die on. 

BM always did the same thing ... She'd give SD's beat-up flowers with ugly, reused, crumbled ribbons that looked like they had been pulled out of a trash can wrapped around the vase for SD's to take with us to DH's family. To make matters worse the vase would be full of water to slosh around and spill in our car. It was BM's way of trying to insert herself and be relevant when she is no longer relevant and also a way to make sure SD's maintain their loyalty conflict with a reminder of BM in tow. It really pissed me off. If I were DH I would have taken those flowers and dumped them on her doorstep. We are not her personal delivery service. She can deliver her own damn gifts. I had to let DH handle it his way. I expressed to DH how obnoxious it was but ultimately it just isn't worth a battle. If you take it on it becomes about you rather than about BM's intrusion. I let DH and SD's handle the ugly flowers from door to door and acted like they did not exist. DH's family can't stand BM so nobody was impressed with her crap. Fortunately she moved far far away so I hope to never have to transport her ugly "gifts" for her ever again.

Well, to start with, she is most definitely not trying to help you out. She is staking her claim to still part of the family because that's how she perceives her right to be relevant. Do absolutely nothing because she's making herself look ridiculous and wasting her own money to boot.

If the nieces' and nephews' parents say any thing to you, roll your eyes and show pity for her ("bless!"). Not your monkey, not your circus.

What is important here for you is to be totally indifferent to anything she does. She doesn't matter. 

Imagine being so desperate to make yourself important. That's her life. Don't sweat it, just let the kids give them if they want to and smile and nod with a knowing look of 'she's nuttier than a Snickers bar' on your face. See the humor in it. 

BM used to send SD with instructions on things we had to do and with whom, we ignored it and if SD had an issue we explained that DH got to decide what she was doing on his time. Of course it was a fight and BM felt disrespected and all that. It's just a way for BM to try to remain present and involved and remind everyone she exists. Marking her territory.

She would never be so generous as to send SD with gifts though. I'd just let the kids give the gifts if they remember. It's not your problem.

BM never got along with DH's family. Until they divorced. Then it was coffee with the sister, gifts for the cousins, etc. I ignored it. I had a good relationship with DH's family from Day 1 and if BM was desperate to remain relevant with people she'd already alienated, well that was on her.