My W had an EA/PA when separated and again just before our D. Looking back I can tell when she reconnected with him and what it did to our R. You need to set some boundaries as recommended by Cadet and Sandi.
I completely agree with Sandi that you started off good and then went against your boundary about living together.
I tried, like you are, to nice my W back. It didn't work. All it allowed her to do was spend time with OM and come back to a comfortable home. It taught her nothing, she had no consequences.
I effected change by putting in an offer on a house. She wanted me out and now she is passed about it.
Boundaries should have the same effect.
Why are you sleeping with her when you know she is actively in an affair? This blows my mind, and I am severely attached to my XW.
No it did teach her something. It taught her she could have a couple of men. Usually in the WAW situation the husband is a permenant plan B or C. A real ED inducing and man-eating type of situation you know.