It's good to at least know where along the timeline you are. As for me, I'd also rather have my wife at least be honest with me, then lie to me (or simply waffle or "cake-eat") and say they'll do no-contact, and then not follow thru on it. Your wife is at the "I understand that it needs to be done, but I'm not ready to agree to it" stage, and at least that provides clarity and it's emotionally honest.
Is her sister supportive of the marriage? To anyone that is, if your "tune" could all be the same, it might help cut thru the fog:
"Sis, I know he's not perfect, but he seems to be genuinely willing to work at things. You can't possibly do that, though, so long as there's another man in your marriage. I really hope you'll agree to end all contact with him, and go back and work on your marriage. Let me know how I can help."
If your wife gets that from ALL QUARTERS, it could help.