They're both in second grade - DS is 8.5 and shes is almost 8. It's been going on in some form or another since they've known each other- so about 3.5 years. I didnt know alot of it was happening since she was very covert about it and my DS had hearing issues/ speech delay when he was younger and wasnt able to tell me at first and even now sometimes it's hard to get the clear story about what happened. and then over time I started catching her at it more and more. I went way out of my way to catch her last summer, and that put a stop to alot of it but if they are actually interacting for awhile it still ends up in a fight most of the time now. There are consequences but I dont feel shes actually learning anything but to try new manipulation tactics. Our efforts to teach empathy have definitely failed other than her saying the "right" thing to our faces and trying even harder to be sneaky. 

I just want them to stay separated as much as possible and I want him to learn to stay away from her (and crap people in general) but it's hard because DH still hasn't given up on the one big happy family thing and wants to encourage closeness (he hardly ever witnesses the fighting himself since usually when hes around all of a sudden shes the perfect child, but she can't keep it up when were all together all day like she can when she only sees him for a couple hours after work). Also we don't have any other kids around very often for him to play with in our neighborhood so he cant just go outside and play with someone else when he is lonely so hes always super excited for her to come to our house despite the meanness since she will start to be nice to him off and on. Shes way more socially advanced then him and he just doesnt get why shes randomly nice and the  mean out of nowhere. They also share a bedroom but thankfully they will be in separate rooms shortly since we are moving.

I agree it is normal to an extent. But the thing is, they dont have a loving relationship underlying that that other siblings do. Like I see my nieces fight over stupid things but then I see them also acting caring and protective toward each other. Theres none of that with SD. It's been her being cruel intentionally since he was basically a stranger. Also, I'm concerned about what the fake victim cries will be about when she gets older since shes a girl and hes a boy and I know BMs history of false allegations towards all of her exes (some of which she laughed about). I have exactly the same outlook you do. I highly doubt shes going to grow out of it, and for all the work we've done to try to teach her empathy all that has happened is her learning to say the right thing to our faces. It annoys me when people say that she will learn eventually as if there arent crappy adults and everyone magically becomes kind when they hit 18.

MIL also complicates things because she hates having "outsiders" around and would love nothing more than for all of her kids to be divorced and have just her kids and bio grandkids around. So if theres ever hint that DS did anything wrong even in retaliation it's going to be a huge drama that I really dont want to deal with. Even when DH tried to talk to her a long time ago for advice on SD misbehaving she just kept insisting it had to be DS fault and acted like she had to protect her from him when he didnt do anything but sit there and take it. Basically the fact that they arent bio siblings creates way more conflict as a whole and i dont want to have my entire family ruined over it, but I can see it happening and my mom has also expressed concerns about it ruining my marriage.

I totally agree that the best thing is for him to learn to stay away from her. I'm hoping that will be the positive outcome from this, that he learns early about toxic people and to stay away from them - something I definitely learned too late. And I hope you're right that he will lose interest in playing with her soon. He already seems to be BUT I've realized recently that her coming and going each week is a huge trigger for him with his abandonment issues from biodad just not showing up for visitation one day and never seeing him since. Hes in counseling for that so hopefully that will help also.

Yeah I agree about the alpha dog thing. What's really weird though is shes not the alpha at all. Shes not a leader and other kids in her class have generally ended up hating her and avoid her like the plague. She completely acts like the stereotypical popular mean girl but shes not and actually seems to have struggled alot with maintaining friendships at all. I dont get it.