As to the question of benefits; that's best directed at the agency in charge. But I doubt that claiming more dependents would interfere with benefits for your own child.
Note that none of the child dependent rules require that you provided any support to your brother-in-law's (BIL) children. All that is essentially required is that you be related and the children lived with you half the year+. A BIL's children are usually your nieces and nephews, even if they are only step nephews, so they are related.
