Considering divorce, scared of losing time with kids

[DeserveBetter]

I’m struggling with how to handle my situation and any advice would be very welcome. Wife and I are both 41 with two daughters, 6 and 3. We both love them very much. Would like to lay out the situation so you have all of the facts. 

Wife has been going through a major mid life crisis and making tons of changes in her behavior. A few months ago she confessed that she’s “developed feelings” for someone out of state (met virtually through work) who has a non traditional approach to life (non-monogamous, doesn’t believe in marriage or long term relationships, they/them pronouns, bohemian lifestyle, etc.) whom she has been talking to and exploring the potential for some kind of romance, but called it off because of the out of state thing and me being somewhat of an obstacle. 

She suggested we become “business partners” who stay married, live together, and raise the kids together, but date people on the side. She’s convinced that this would be easy if I just “look around” because she has a mentally unstable friend who she’s confided in who consistently dates married men. I’m the primary breadwinner and she obviously doesn’t want to lose that. We live in Texas where there is child support but no alimony.

I’m really not interested in this setup. I feel offended, emasculated, hurt, and embarrassed, and I have told her all of this. Call me crazy but I’d like a wife who is committed to me, at least emotionally, above others. We’ve attended counseling and had several conversations about how to move forward but are in a bit of a stalemate. 

She is often irrational and logically inconsistent in how she is approaching this, and she even recognizes that but nevertheless says that even if things are one way, she feels that they are another way and that’s what matters. She has been attending solo therapy too but her therapist is a new wave kind of person who talks with her about “energies” and similar concepts, which feeds her newfound passions for tarot cards, astrology, and other mysticism. She has said several times that she blames the failure of her proposal, and the downward spiral of our marriage over the last few months, on the fact that I’m too “rigid” to see the “shades of grey” that I should embrace. 

She is very cold now and we only talk when parenting is involved. She’s also terribly enmeshed with her parents, has been for a while, and has fallen back into having them around or on the phone as much as possible, possibly as a way to avoid dealing with me. We are having what is supposed to be our big “is there a possible way forward” conversation in early January but honestly I’m not seeing how there could possibly be one.

I know this setup can’t be healthy for the kids, but I’m struggling mightily with the thought of losing them 50% of the time or even more. The fact that others have been through it inspires me, and hearing from others that it gets better eventually after divorce is comforting. I know there are no good answers here and that some sort of separation is almost surely necessary, but I’m just dying inside because of the kids.

I think leaving will be worth it in the end, both for me and for my kids, even if I’ll have to go through some really rough times to get there. However, I don’t want to take the plunge without soliciting as much feedback as possible. Is there a way for this to work? Should I stay with her for a longer period to see if things change again? Or would I just be wasting time and keeping the children in a toxic environment unnecessarily? Any and all feedback is appreciated, even if it’s critical.