A: The idea itself is perfectly acceptable. The location concerns isn't.
It's not okay to hold the baby shower in an actual shower.
And it's certainly not okay for the shower to be in a prison.
Handing out toothbrushes as party favors seems a little tacky. Handing out toothbrushes, sharpened into shivs, seems downright alarming. Handing out a toothbrushes, sharpened into shivs, with your daughter-in-laws named carved into them, borders on conspiracy to commit murder.
I'm not sure how things work on the inside, but out here in the civilized world, we cut our in-laws to ribbons in a figurative sense, with sarcastic comments about their weight, careers and parenting.
Use your words.
The cuts go much deeper. And they last a lifetime.