Your spouse doesn't seem to have the guts to tell his family to move out. It is hard to ask a loved one to move out. For his son to ask his mother to move in to your spouse and your home is very disrespectful, I agree. Also, if his son has a live in girlfriend, then they need to have their own place and not leech of their father. Based on what you wrote, it seems your spouse is being walked all over by his family. It might not be that he doesn't love you but he doesn't want to feel he is abandoning his family, even though you are family now. It might also be that he is trying to avoid conflict and resentment from his family. He seems to have chosen his family over you. You gave him an ultimatum and didn't keep it. I can tell that you are now having second thoughts and are considering compromising, which sometimes we do need to. As you mentioned, he doesn't want to change, doesn't have the courage to change or is afraid of backlash of his family more than you.
If his children needed some assistance in order to get back on their feet e.g. Save money, then it would be okay but with a limit. The children are comfortable there at the house and have everything they need and their father doesn't say nor reinforce things, why would they or anyone leave? He knows you and him are settling property and still doesn't do anything about it. If you really want to have a clear consciousness, you can talk to him and tell him that you love him and that you don't want to leave him and his son. I'm sure you told him that before but now that you are settling property he might take it more seriously. However, you need to have one-on-one with your stepson and have a heart to heart talk and tell him that it isn't that you don't love him but explain things, if he is old enough. It appears that you don't have children of your own. There is a bond between parent and child but there is also tough love. If a parent has done a job well, then they have taught their child to be and have a life on their own without relying on the parent. There will be times when the child will need help, but you can only help them so much before the parent becomes an enabler.
Take care of yourself since it appears no one is looking out for your well being. Take it one day at a time and find things that will make you happy each day so you can overcome your "pain, anger, rejection, betrayal and loss." Take time off from him to reevaluate. I'm not talking about a few days but a month or two. Once you accept the fact that you are not going to be retuning and made up your mind, then you can start moving on. As long as in your mind there is a possibility or hope that there will be some resolution, it will be hard to move on.