All WASs use that term appropriately. Since they believe, at the moment, that they're never returning, they do not wish to encourage the thought that they will in others.
W says that this thought is so unhealthy that it worries her
We validate our WAS's thoughts and feelings. This is a legitimate concern of your W's.
W says that she's made a decision to stop trying to protect D's from phone conversations, letters, reading material and doing certain things for them. They need to see her life since all they get is my view of things.
You and I know that it's not mentally healthy for a young child to be privy to these aspects of the adult world.
At one time my first reaction would be to defend myself, but not now. I am concerned that W's obsession w/OM will adversely affect D's and certainly affect her relationship w/D's
You've mentioned this concern before; how W's involvement with the OM will lead to this or that. I think you're still too focused on them, and so, handing them a lot of power over you. Ultimately, whatever your W does and how it impacts her relationship with D is out of your hands.
I could warn her, but that would fall upon deaf ears and throw more kerosene on the file. Should I not respond? Or should I acknowledge receiving the email and thank her for sharing her feelings? Your ideas are appreciated.
My thoughts are that with something like this, one acknowledges and validates the concerns of the WAS. Find points of agreement therein, and establish some common ground. For example, you both wish to do whatever is most beneficial for D, that you both wish to put aside personal differences for the sake of the child, etc.
From there, I think there is a need to address the issue of D witnessing details as they occur. There's a fair amount of material concerning children and divorce, and you may wish to get somewhat acquainted with it, so as to get some ideas as to what course of conduct from the parents would be most beneficial, and put those forth as suggestions to the WAS, in seeking a mutually agreeable way of beneficially handling this. Good luck.