Yep it makes perfect sense. My WAW is doing the same absurd and reckless things. It's unbelievable how absurd their fantasies are but you can't control their train wrecks. All you can do is protect yourself (and your kids) as best you can and get out of the way.
Have you thought about exposing her affair to her friends and family? I did just that and my wife was furious but the lies were hers to bear, not mine. Her shame was not mine.
I filed for separation to protect myself financially should she wrack up credit card debt or buy a car or anything else financially foolish. As we are still married, I would be 50% responsible. Yikes!