She can invite whoever she wants. But attendance is going to be very small if she specifically bans all significant others. I'm not sure if it it's necessarily rude, but it certainly is odd. If the size of her place really is the issue, why not meet a restaurant or find someone in the group who has a bigger house? And from a practical standpoint, I don't think she'd be happy even if all the "extra" people stayed at home. She'd just become annoyed that much of the conversation was centering on how people SOs and kids were doing. Because such talk would be natural and inevitable. Not having the people at the dinner would not magically cause them to cease to exist.