DDJ, I have not read all your posts. I mainly shake my head and move on b/c it seems you have a lot of things mixed up in what you perceive in some advice....but you are not really "listening". For a moment, let's put all the cliches aside, okay?
Yes, things may get worse, but it is your choice to stick around and watch it get worse. She could get pregnant, catch a STD, aids, get beaten, have a crazed OM come into the home............or any number of very bad things, due to her association. I don't know what is driving her to do the things she's doing, other than she's getting something out of it. If nothing else, a lot of attention......including yours.
I say B.S. to it being a matter of her "finding herself". That cliche has been worn out by WW's across the planet. A wayward woman can find all kind of excuses for why she does what she does. However, none of her behaviors are excusable!! She is a wife and a little boy's mother. She needs to act like it, instead of a girl gone wild.
When I got married, I knew there was a conduct of behavior that decent married ladies conformed to, or else they brought shame to their H and their family. Maybe it's principles/standards taught from childhood, tradition or religious beliefs....... but people use to get married with the understanding that anything that reflected immorality would not come into their MR. The family and home were to be protected from wickedness. If one of the spouses should stray into a debauchery and refused to stop....then the other spouse took steps to end the MR. Somewhere along the way, our society has been taught we should tolerate, even if we don't approve. I am telling you that you do not have to tolerate this behavior in your marriage.
Stop tolerating this filthy, trashy, mess that you are basically condoning by playing these silly games and staying with her....and allowing your son to grow up in that influence. You can't control her, but you can take control over your life and protect your son.
Forget boundaries at the moment, b/c you are missing them big time! You don't understand boundaries, correctly. You call it "boundaries" but you basically try to punish and control her.
Let her go. No threats, no ultimatums, no control...........just drop her. Stop living in the house with her, and get a court order for temp child custody, if you can.
It is not about what you feel should work in your M. It is about doing the work that gets the right results. Do what works!