MC said it was throwing off the balance in our home and the natural balance of parents on the same level and children on another level.
Exactly. So what did your H say about all that?
To not come and see me test for my belt sends a huge message both to me and to the kids. Mommy is not as important as everyone else.

That's also exactly what I was thinking. And clearly, your H is OK with this set-up. That is a HUGE problem and one that personally, I would deal with before any of the M issues. Like I said before, even if the two of you D, the kids will always be there and they need both parents to raise them Together even if they are not M anymore.
Were you around when I posted about the bedtime issue for S5? If I push it and H refuses to back me up (H would even continue to play the game with S5 or whatever they were involved in) and I try to make S5 do what I say, he cries and gets confused because Daddy is saying he doesn't have to. Daddy looks at me like I've lost my freakin mind and I feel like an a@@. See how nicely that works?
All the little things add up, like setting a consistent bedtime. Maybe the two of you could agree on some things related to the kids so that it reduces some of the confusion for your S and D. If he says no to something as positive as that, I really don't know what to say anymore related to your H willingness to change. If he wants to be an A-hole to you, that is one thing and something you as an adult will need to handle, but to use the kids in these power plays is totally unacceptable. I think you need a hard boundary there.
H has more of a 'normal' R with D3. He doesn't smother her or play her against me. He lets me put her to bed, decide what she wears, etc. H has very much set up the family in the way 'S5 is for Daddy and D3 is for Mommy'. S5 has even said that, so he very much picks up on it. D3 loves H very much and she is very close to him, but that desperation is not there on H's behalf, it's more of a normal coparenting with D3.
Let me just say this, my H grew up in a similar situation. His F and him were close and his M and his sister were close but not all together as a family. The lines were drawn in the sand and everyone knew it. H's father left his M the day my H left for college. His mom and younger sister were sort of left to fend for themselves and his sister is very hurt by this even today in her 30's.
I'd break that "seperate teams" mentality asap.

I really feel horrible about your situation Heather but it makes me so sad that the kids are going through all of that, and with the two of you still together. Don't you see that? There are tons of issues here that are going to damage those kids. That's why I said before if you did choose D, you may actually be able to have some better control over how the kids are raised, and if nothing else, they will not have to witness how horrid your H treats you.