I wouldn't do anything, seriously. Human relationships are complicated and strange, what you may find intolerable is apparently fine and dandy with them, and really none of your business.
Obviously they're getting something out of nephew being there, even if it's only a sense of their own self-worth by the fact that they've taken him in.
signed~ tried to do the well-meaning friend bit in the past and had it blow up in my face~ world-weary wombat
ps...feel free to sess my friends any time. I'd be grateful if someone like you had my back:)