She wants to be family and friends and a divorce.

[MrBond]

"So your advice MrBond is to confront her? demand that their relationship stop, that she come back and work on ours? or no friendship, no family , and divorce papers asap?"

Of course not. What I'm saying is that YOU have to understand that there can be no reconciliation unless the OM is out of the picture. You can't demand that they end anything because that would be controlling. You can only take action on things that are within your control. It has to be her choice on her own to come back.

Right now it seems like you're not willing to give up the OM and that both of you are in love with him. You don't FEEL or BELIEVE in the need to break off the relationship with the OM. If he's as concerned as you say he is about your relationship, then if you talked to him about it, he'll back off. But it has to be in a way where he establishes a boundary with your W and tells her that he will not be responsible for the demise of your M and that he has ZERO interest in her. That's why the sharing of your W with him needs to stop.

And just FYI, because of your lifestyle, this cycle does get repeated with different people. There will be times where if there's another woman involved, you could be the one in your W's shoes.