I'm sure you feel overwhelmed and exhausted. Whatever her issues, you are not finding success in your current approach to setting boundaries with her. And limit setting is clearly needed.
Currently it seems most of your energies are going into almost obsessing about the details of the last conflict. She's living in your head in a kind of hopeless and defeated loop. Often the things that a troubled person is pushing for (others being locked in a struggle with them) are far from the things that person needs or will benefit from. It doesn't help either of you to be going round and round this way. So it's time for trying new thinking and behaviors!
I wonder if you could focus elsewhere than where she seems to push you. Put energy into seeking information about how to set boundaries, especially with folks who have mental health issues. There's the classic Boundaries book, and the Al Anon literature is great in how to stop codependent enmeshment, and on this site the article on 15 Things Not To Do With Borderline Personality has excellent general advice.
It doesn't matter what the specific diagnosis is if strategies for boundary setting start working for you when you employ them consistently. And that resolute consistency is crucial. Once you've really accepted that the current cycle is not helping anyone, and that it's the kindest thing you can do for everyone to get off the merry go round, then you can be determined and constant in a new approach of your own choosing.
May you find relief in taking empowered action!