Whatever. She always does this, beating around the bush while an elephant is standing in the middle of the room. The whole time she was speaking I kept thinking to myself that the simplest explanation could very well be the answer -- that S7 and S3 are simply reacting in protest to the loss of their home and their family.
NoCode... I know this all too well. My XW has my kids in every freaking activity imagineable. A counselor we were seeing at one point commented (as have numerous family members) that she believes this is distractionary compensating behaviour. Not unlike perhaps your W's over-talking.
In looking at this sitch with my ex, and others, the Parable of the Talents comes to mind ( Matthew 25:14-30). Where the wealthy businessman before he leaves on a trip gives 3 of he servants a number of talents to manage while he is away... am sure you know it.
Anyway... one conclusion I come to is that the guy who did the least talked the most. If you look at the text, the guy who only buried his talent int he ground and didnt even get interest spoke far more words talking around his poor decision than the two who did more and got results.
Perhaps, somewhere not to far below the surface, your W knows what she is doing is wrong and hurtful. Like my XW, she may have a sense that she is making a decision toward permanent, lifelong compromise and this discomfort is expressing itself. Denial is one of the most amazingly cunning things. My XW expesses her denial in avoidance and by attempting to be super-mom. It started immediately after we separated. I had coffee with one of her family this week and the family member still shakes her head at how overloaded my kids are.
And yet, way, way down the list is time and relationship with Dad. She sent kids to counseling but discourages them from doing any counseling with me. Nor will she do any counseling with me. But she will do counseling with OM and his daughter... btw... his daughter is now distanced from her Dad. Myriad of reasons I am sure, but this is all at the expense of what "they" created and what "they" want.
It is so freaking convaluded and full of contradiction. No wonder the world we live in is so messed up.
Anyway... I know the type of scenario you describe well.
I have found that if I just keep making simple, responsible, honourable decisions, life works out a lot better. People will recognize on their own the over-compensating behaviouir of your W. Sadly, the kids are the most innocent victims in this whole thing. But having one sound, fair, and rational parent is more than most have and will serve them well.