It's quite a recipe for stress what you have now. By one hand you are playing NC w/W and by other she is now looking for emotional support with her kids.
And, in my opinion it is not fine. D11 and D14 are just too young to be listening and dealing with W's issues. It can leave scars that won't be repaired very easy.
This whole thing with this jerk other man is a bunch of bull. As Sunny, V and Toots said, W gives a bunch of explanations about the monster, but she is not saying...My family is very important and I am about to loose it all if I don't get things straight.
I really wish that we did not need to tell you all this. That W would get real, clear her mind and make some sense, but this is not happening and she is hurting you and her family.
Please RD, try to make sure W is not filling the two little ones with too much information about her life, about OM. Even the whole menopause stuff is not something to be talking to any kid in this age.
I know it is hard to control all what comes out of her mouth, but if she is crossing the line on this, I would give a first notice that she needs to stop and if did not stop then I would get some lawyer involved in have her with control visitation.
This whole thing is driving you insane and is probably leaving the kids with a lot of insecurity, wounds, sadness.
I am dealing with almost same thing, and as hard as it is, I need to protect the kids against my crazy H.
Things may change, maybe one of these days she will snap back and will be someone more caring and not so crazy. But for now, what is most important is to maintain some sane environment.
I really feel for her, it should be very hard to loose yourself to this point. But you can't do much for her anymore, you tried a lot to help her, but she insists she does not need.