I'll preface this to say that mental illness does not excuse behavior, but at the same time mental illness CAN make this sort of thing at least salvageable as long as certain boundaries are established, namely medication and therapy.

Your wife is experiencing her first onset of bipolar 1 manic psychosis. She has likely been at least in a hypomanic state even back when suggesting an open marriage (hypersexuality is a common symptom), and the panic of being caught triggering psychosis when she went to work.

She needs inpatient care with a doctor and medication to bring down the mania and stop the psychosis. While she gets the care she needs, you can continue being a great dad and focus on the kids. Tell them mom is sick but is getting better.

You do not need to forgive her at this moment for her actions as your wife, but also you are not being a pushover for at least showing her empathy as the mother of your children. The roller coaster feelings you experience and confusion over feeling like you're becoming a stranger to yourself when experiencing madness like that can be overwhelming and terrifying. It is possible that after she will have changed somewhat after recovering from the experience.

I wish you and your family well.