Keeping kids in a bad situation with a parent who is emotionally unable to be a good parent for whatever reason, is harmful to the kids. Take the kids out of the situation, help them to understand that it is not their fault, and help them to understand the reason(s)their parent is sick. Then help them to acquire the tools they need to have so they can have a "relationship" with the sick parent without getting harmed.
I hate to say it depends, but it does. If she is a true psycho-bitch, then divorce and take the kids with you. Protect the kids.
In my son’s case, he married a woman who, within a month, was physically attacking him with anything she could grab several times a week. On the nights she didn’t assault him, she would scream obscenities for hours.
And yes, she claimed that if they had kids, it would get better, and no, she didn’t need any counseling.
I told him to run - but as it turned out, she filed for divorce a few months later.