Hi there confused68. Sorry you find yourself here. But you're in good company.
I see so many similarities between your wife's actions and mine. My wife, too, made some changes in her life, got exposed to a new group of friends and then started mirroring their partying ways and engaging in reckless, selfish behaviour... seemed to lap up the attention she was getting from her new girlfirends and the men they hang out with... then said she wanted to end our marriage.
I thought it was MLC. Our MC thinks it's actually a personality disorder centered around an addiction to outside attention and affirmation. Regardless, it's horrible.
Like you, I love my wife... though not the behaviours she's engaging in right now. And I'm not willing to throw away over a dozen good years just because others think I shouldn't tolerate what's happening currently.
Ultimately it's your call whether you want a D or not. If not, give it some time. No matter what happens, at least you tried... and you (and your kids) will always know that.
In the meantime, don't support her behaviours. Don't bail her out financially. Don't enable her irresponsibility. If she's promised something to the kids, hold her to that and don't step in to bail her out. Let her fail in her kids' eyes...don't cover for her.
If your wife is like mine, she's probably being pretty disrespectful of you right now... angry... insulting. This is not about you. It's about (1) the shame and guilt she feels about what she's doing, and (2) about the fact that she's realising she's not (financially or otherwise) independent like the people she's hanging out with are. It's classic MLC -- the grass (any grass) seems greener than what she's standing on, and it's irritating to her that she can just easily be on that other green patch.
The decision whether to grant a D or not is yours. In the meantime don't support her. Be the best dad you can be. Take care of yourself -- for your own sake and the kids'.
I'm currently in limboland myself... but have chosen not to discuss D with W right now at all... it doesn't suit me and I don't think it's the best thing for either of us or our son, so I won't validate that option with a discussion.)