This sounds similar to a situation that I was in with my ex. Yours is definitely way more intense and serious however. I tried very hard to accept their relationship, but it was difficult because I felt like they were keeping each other in a mutual state of dependence that didn't foster a mature healthy outlook on the world. I felt like it affected their ability to cope with the realities of what it takes to make it in society as they encouraged each other in what felt like to me to be delusions.

It was very uncomfortable for me because I didn't want to say anything out of respect for their relationship, but to protect my own well-being and my own future I couldn't excuse what they were doing. I always felt that his sister was unhealthily attached to my ex. And unfortunately, while she tried outwardly to accept me as a family member, I could tell she was very envious of my life. My life seemed more put together because I come from a stable family and I'm a very practical person.

I chose to cut out. I knew there was nothing I could do and I couldn't imagine raising a child in this environment. I want to give my future children everything I can, and I couldn't imagine raising children with a jealous sister-in-law who would want to be a major part of our lives but still envy anything nice that we had and an inability to be truly happy for us. She needed a lot of attention and praise and I knew that our dynamic would forever be one in which she would seek attention from her brother and me, and I would have to give her that without expecting any real warmth from her.

The most important thing is how your significant other handles the situation. If he's able to balance both your needs and her needs and also recognize the sacrifices that have to be made when children are involved. It's an unfortunate reality of life that siblings will grow apart to some extent as they start their own lives. If one sibling is somehow emotionally stunted (my ex's sister had a series of unhealthy relationships and I don't envision her getting married anytime soon) and doesn't go on to form their own separate identity, well, that's sad, but both him and his sister need to understand what is happening. That it's time to try to move on to the next stage of life and prioritize your needs as well.