There’s so much here and I’m lacking way too much context and knowledge to give any kind of advice, so all I’ll say is this: other people’s happiness, emotional stability, and general way of dealing with any kind of relationship is not your job to fix, take care of, or even try to improve.
I think the best we can do is to not continue to mislead others as soon as we suspect that’s what we’re doing. Honesty doesn’t always win, but that doesn’t change the fact that it’s the right thing. The only thing that ever works, actually.