I've read on this forum that the WAW needs a big event to bring her back to reality. Outing her EA with my BIL would absolutely be a huge awakening, but it could very well end our M in an instant.
Stop right there. In this particular situation, it should be about your integrity and doing what you believe is right. Doing the right thing should be your primary concern, and whether it wakes up your WW is secondary.
Your WW is saying all the things every other WW has said. Plus, she is basically making you feel responsible for fixing........or rather, covering her mess. Whenever the H takes the blame for his W's A........he is setting himself up to fail. In your case, it will take down your sister with you. Your WW is trying to make you think you will be responsible for tearing your family apart........when in reality, it is your WW and BIL who have done the damage by cheating on their spouses. Nobody is responsible for an A, except the two involved.
She believes she has you over a barrel by telling you it will ruin the lives of your children and the lives of your relatives by telling the truth. However, let me warn you, if you lie to them by covering her A..........she will never open her heart to you again. Why? B/c two wrongs do not make a right, and your M will based on a lie...........and so will your sister's. Not only will she never respect you b/c of your lack of integrity, but the chances of her becoming involved in a PA (either with the BIL or another man) and finally leaving you......are even greater.
She should be begging and pleading with you. Instead, she's threatening and demanding. That tells me something about both of you. And the pitiful thing is that you are worried about losing her, aren't you? Not b/c of your kids, or anything or anyone else..........only you. And, you are afraid of making her mad b/c you think it could cause her to leave. I find it interesting that based on your account, she just assumes you will stick by her. Why is she not worried that she can cheat on you...... and you not dump her?
I'll give you a little history about some people who have come here. An over-whelming majority are made up by LBS's. I have been here nine years and it has been extremely rare to see a WAS/WS post. Would you like to know about a few WW's that came here with broken hearts over their own cheating behavior and asking for help to save their M? Oh, and of course, their A's had ended, so why were they here on a DB board? One common factor for those women was as soon as the H would discover his W had cheated........he was gone. You wanted to know something that woke them up? Well, there it is.
Anyway, it is your decision. Whatever you decide, you will have to live with it. I hope you make the right one.
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!