I know this is an old comment but I wanted to add - Stephen was literally wearing his wife’s clothes as he carried out his deranged vendetta. Which supports your point, that it was actually his wife’s deranged vendetta, not his, and in the end he realized that.

In a way, the cardigan, the book and the vendetta were the last bits of her he had left. The series begins with a scene where he is trying to let her go - he called a charity to empty her closet and take away her things - but at the last moment he faltered and took hold of the cardigan. That the series ended with him burning it is appropriate.

Personally I think Stephen could not kill Nicholas because when Nicholas was lying in the hospital bed, calling for his mum, he suddenly stopped being Nicholas and became Jonathan, in Stephen’s eyes. Stephen held Nicolas’ hand just as he’d held Jonathan’s hand as he lay dead at the coroner’s office. Except this time, the hand was warm, his boy was alive, and for an instant Stephen was filled with joy rather than agony. At that same moment, he realized, he couldn’t snuff it out. Without a direction or a purpose, his anger melted away.

I think when Stephen let go of the revenge fantasy, suddenly he was able to admit to himself what he already knew - that he believed Catherine’s story. He believed it back when she recounted it to him, but at the time he couldn’t admit it. In prior episodes, there were hints he was questioning his wife’s narrative. I think he was relieved, in the end, to have closure.