Oh yikes. That's a tough one, for sure. I go back and forth between being honest and letting your FI know the truth - since YOU will be wearing this for the rest of your life! But at the same time, you then risk hurting the feelings of both him and your FMIL. It sounds like maybe your FI knew your style, but didn't trust his gut well enough. That's too bad.
Does he know how you feel? If he doesn't maybe you can explain to him that he really did know you best, and while you appreciate the gift, you'd rather have something less flashy, and more "you." And then he can talk to his mom and try to explain that you love the ring, it just isn't you and you'd love to have something a little more simple.
Some women do operate under the assumption that more, and bigger, diamonds are better - and don't understand when some of us just don't agree!