Wow, that's a mess. I'm so sorry for all that you have gone through, just shaking my head over here.

I don't have much time at the moment, but would point you to YouTube and when narcissists slander you. That may not be precisely what you're dealing with, but it would probably feel familiar enough to give you some ideas. Dr. Ramani is always a good place to start. Maybe others will have other ideas.

I've dealt with people similar to what you've described, and the hardest thing for me to ever wrap my head around, was that they enjoyed it to the degree they did, even when a normal person would not. Like when you confronted the BIL, you were probably thinking you were going to have an adult conversation and get on the same page with him. I did that for years before coming to understand that they intentionally do not want to be on the same page because it's how they maintain control. They don't care how dirty or damaged they become, so long as they feel like they are in the control position.

There's a book titled "Controlling People" that explains this sick dynamic very well. The more you fight it, the more they like it, the worse it gets. The only thing that seems to work is to take a detached, high ground stance and keep it at all costs. What that does is stop giving them the feedback that they crave and enjoy. They're like dogs with squeaky toys- they chew and chomp, and it makes noise and gives them the feedback they like. It's not easy, especially with that dynamic you have going on.

You're in a tough place. My heart goes out to you.