Ask DH how he plans to balance this all, keeping the marriage safe, you safe and keeping the drama away from your home.   Is he aware of any of your questions? Is he apprehensive about trying again with his kids? What if it blows up and they never reunite, can he live with that?  You might consider some marriage counseling with an experienced blended family therapist to formulate an agreement and plan around this.  

I totally agree with survivingstephell.  Our struggles with estrangement and my need to disengage are around my SD19, so just now a young adult.  Counseling brought my DH and I to a point where we can be honest with each other without getting upset or defensive, and that saved our marriage.    In answer to your questions 

1) I let it be that DH has a relationship with SD, separate from me.  I support and encourage it, but I do not want to participate, and he is very understanding of that.   Their relationship is very up and down, and it is hard on him.  I will listen if he wants to talk, but I don't ask a lot of questions anymore.  As long as he isn't hiding things from me that would directly affect me, I don't feel any reason to worry about it.  I want him to have a good relationship with both his kids, and I hope someday we will all have one.  But for now I am protecting my own mental health. 

2) I am not sure if obligation is the word I think of, but I do feel like my DH has a responsibility to try to resolve the issues and behavior.  However, that has been a struggle from the beginning for my DH, and part of what got us here in my opinion.  He tends to ignore the hard stuff in the hopes that it just goes away.  I actually told him after the last incident with his SD that was related to me and my son that I did not want to keep trying with her until we all sat down and talked it out.  He has not made that happen and as far as I know, does what your DH does, talks while avoiding the issues. 

3)  I do not feel betrayed, because I know how I feel about my own son, I will always love him no matter what.   I can't imagine him ever acting like SD has, and if he had he would have been quickly corrected, but regardless, a parent child bond is something I would not get in the way of.  But in my case, I am able to excuse some of the things that have happened because my SD is young, she has been influence by her mother, has been allowed to get away with a lot of poor behavior for a long time, and I think she believes herself, I don't think she views what she may tell others as deliberately lying, she just sees herself as a poor neglected stepchild whose father doesn't care about her so that how she paints the picture.  If I thought she did something to deliberately hurt me I might feel different, or I may feel different if this carries on for the next 10 years ago.  But for now, I am making an effort to keep negative feelings at bay, as they won't do anything to serve my marriage

4)  I don't think anyone should ever have to pretend anything, but, I am guilty of it.  For the rare occasions I do see SD, I put on a smile and go on like nothing ever happened.  After days of anxiety leading up to it.  I am not a confrontational person at all, and it's easier for me this way.  Which interestingly, when I realized this about myself it made me understand why DH had been how he has been in this situation. It's easier to pretend things are ok, but it sure doesn't fix anything.  Might even make it worse.  I also play along because I don't want to do anything that would make her take it out on DH, as has happened before. 

5)  If DH and I had not learned to communicate honestly, trust each other, and give each other grace, it most definitely would have weakened our marriage.  I am proud of how far we have come, although I hate the situation of it being separate.  

6)  In my opinion, if SD had caused me direct harm, or DH was withholding information or being sneaky about things, then I could see how their relationship without me could feel like a betrayal.  In my case, it's my choice not to be involved, not DH holding me back.  I don't know what kind of message SD is getting from that, and as I think about it, I don't think it matters to me.  My primary focus is on DH, I want to support him having a reasonably healthy relationship with his daughter. 

These were very interesting questions!  I have no idea if I am on the right track with any of my views, but based on my experience of reading these forums for years, I have found it so, so helpful to hear what others who have been through this stuff are thinking.  If nothing else, to know we are not alone!

1.  Have any of you ever just let it be that dh has a relationship with your adult stepchildren and you lived separate lives in that regard?

Why be married if you are going to live separate lives?  Don't waste your time.  And no, my wife and I are equity life partners.  Neither of us would tolerate this crap from the other. We raised my SS together, we have a relationship with him together.  As his mom and dad.

2.  Does dh have an obligation to resolve the issues and behavior they have exhibited toward you, the stepmother before proceding in this relationship?  Or what if he just "pretends it never happened" to get along with them?  
 

DH has an obligation to confront and effectively deal with anyone who disrespects his bride.  Regardless of who they may be.  The polluted output of his loins or not.  Resolving the issue is not the point IMHO.  Effectively delivering the message that they will suffer beyond belief if they ever again disrespect you is the point.  DH has to be man enough and have enough balls to deliver  the message that  you as his bride and his marriage to you will be respected.   Period, dot.

3.  Do you feel betrayed by this renewal of relationship if he "slides their behavior under the rug"?

You should feel betrayed.  He betrayed you by tolerating the noxious crap by his kids toward you.  He is a ball-less non man. End of discussion.

4.  Should you, as the stepmother, also "pretend it never happened", they never said those things, never tried to spread rumors and destroy your character, never lied about things they did?  

No, you should not ignore it.  Rather you should hold your ball-less wonder of a DH's minuscule testicles to the red hot branding iron until he deals effectively with his noxious spawn by brutally rubbing their noses in the stench of the facts of their noxious behavior toward his bride.  Fact, facts, facts.   And facts again.

5.  If dh establishes relationship and you have a separate life in that regard, does this weaken your marriage?  
 

What marriage?  Why be married if you have separate lives?  Separating that major part of his life from you is betrayal.  His ignoring how his polluted genetic progeny treat you is serial betrayal and needs to cease immediately if not sooner. smh

6.  Is dh establishing a relationship with his children that does not include you a betrayal?  Does it send the message to the adult stepkids that they are "right", "justified", it is just fine with daddy how they have treated you?

His tolerance of their shit treatment of you is not only betrayal it is active facilitation, aiding, and abetting of their treatment towards you.  His wife, his bride, his equity life partner.  My father would have chewed us up and spit us out if we had treated his bride as your  Skids treat you.  Your DH is pathetic.

Why for F-sake are you moving back to the town that is the epicenter of this shallow and polluted behavioral gene cess pool?  Really?  You are not the one with the ethical dilemma, your dipshit husband is. smh

You have to value yourself before your DH will cease to sacrifice you to his noxious failed family genetic refuse  and value you rather than continually betraying you to them.

IMHO of course.