Well sure. Mom wants it with everyone. But if daughter #2 says, "Sorry .... that's not what we want to do", what's the daughter afraid of? That mom will then cut off the money completely? Daughter #2 is a grown-up. She can't change how her mother behaves, she can only change how she reacts to her mother.
Considering that D#2 isn't close to her mother and bears obvious resentment, I can't imagine that it would be hard for her to tell her mom that she's not coming over. Or maybe have D#2 come without the family so that the kids don't have to see the disparity. If mom wants to know why the kids aren't there, D#2 simply says that as the kids get older they have all these other draws on their time and since mom can't be flexible on when the DD's are there, she had to come without the kids.
I don't know that little kids understand how much things like jewelry and clothes cost. Unless the mom is actually giving D#1 a DS and D#2 a truck (which seems unlikely). And its not like D#2's kids have to compete for presents with D#1's kids, since D#1 has no kids. The kids may notice that their aunt gets more presents than their mom does, but whether or not the KIDS resent that will depend on how D#2 presents it to them.
It's pretty much
entirely up to D#2 as to how this all goes down. She can decide exactly how to react to this. If she gets upset and resents it, her kids will grow up disliking their grandmother and looking at everything based on how much it cost and did the other guy's stuff cost the same or more or less. And somewhere along the line, when D#2 is giving presents to her own kids, those kids are going to start comparing gifts to be sure she's spending the exact same amount per kid.
If D#2 doesn't make a big deal about it, her kids will grow up thinking their grandmother is a strange old lady that they only see a couple of times a year. But they'll also learn to appreciate the gifts they are given -- both tangible and intangible.