I’m glad you are still working with your new therapist. She is right that this person should be reported. She really isn’t in a good place to be doing counseling with others. It’s not healthy for her for no one to be calling her out on this.
Do you practice setting boundaries in other areas of your life?
You already know this relationship is unhealthy. The root problem may not be this relationship. I think it is whatever pain this relationship helps you escape from. Think about it this way: by being caught up with all this, what might you be avoiding feeling or doing? The discomfort of saying “no” might be one thing you avoid feeling. Another way to think about it: what “benefits” do you gain by staying in this relationship? Perhaps it’s rhe benefit of never having to grieve, never having to be alone, being able to focus on her instead of yourself, etc.
Find other ways to address those root issues, and the pull of this relationship might lesson and you might be able to better pull away, and the initial pain and grief of doing so.