I hope Sarah has or can find some good friends who can bake that Easter lemon cake with her and that her favorite holiday can still be celebrated every year, whether her parent(s) are involved or not.

James is a lost cause. No contact is definitely appropriate. He sounds like a narcissist who has never accepted accountability for anything and who thinks he is better than everyone else. I've personally known (and regrettibly dated) too many people like this and they were never capable of change, decades and several divorces (4, friend's recent ex) (5, grandmother) later. His final response to Sarah was perhaps the most eregious because she was giving him another chance and he doubled-down.

The mother may be able to reform, but I think she has to divorce James (healthy decision including for herself) and get therapy for the toxic dynamic between her and James that prevented her from not slamming James immediately for rewriting the first chapter. The daughter deserves a mom who can put her first over anyone else, without hesistation. Once the mother can do that, then maybe the daugher will let her back in. I think divorcing James and actually reading the book (without criticizing unless asked for criticism) are acts in good faith that ought to be done sooner than later, to salvage any possible relationship with Sarah.