Especially agree that maybe she should be assessed for dementia or other neurological issues, especially if this is a change in personality for her.

One of the earliest signs of dementia my dad had was that he thought he was regularly talking to strangers in another country who wanted his money. In reality, he was not talking to anyone, but there's a startling disconnect from reality that stands out. In dad's case, he seemed relatively normal aside from these occasional delusions.

Also have to agree that it's not your problem to solve, but it is kind of you to look for solutions to help assist this family. Sometimes when you're in the thick of a crisis like this, it's hard to know which way is up. Someone who's a bit more objective (presumably like you are) may be a blessing to the family.

Her behavior seems like that of addiction to some extent too. She's chasing some fix that she's getting from interacting with this person/entity. It sort of seems like someone who knows that using a substance is probably going to eventually cost them everything, but they can't stop themselves because it feels so good. So, just as a thought, perhaps there's some type of addiction specialist who could address her compulsion; perhaps the family could even do an intervention?

You are so nice to offer your help, but be sure to tread lightly and keep your own boundaries intact.