It is common in such circumstances that children will cling to their original parent and reject the step-parent.
Her successful transgressive relationship behavior here sets her up for dysfunctional relationships in her own future, as well, I believe.
It is as though a fence or boundary has been drawn around the adults which functions to keep their secrets inside and to unify them in front of their children.
It’s not so much that having this idealized boundary around the adults in a household is so great in of itself.
If your husband has enough insight to know the motive for his behavior, he will hopefully also have enough insight to understand the boundary concepts and how his behavior is not helping your mutual situation but instead, making it worse.
What needs to happen here is that he and you together agree to strengthen the boundary around you that protects you from your children and vice versa, protects your children from you both.