"he can't leave cos he has kids"
Painful.
"she hasn't got room in her life currently for a full on relationship"
No. A life is not a room and love is not (bulky) furniture. Something is stopping your friend from opening herself to a relationship - actually, I would say many relationships because the nature of an affair means that a number of intimate relationships are foreclosed (it will put limits on relationships with friends and family, it curtails the ability to make mutual friends) - are closed to her.
Why is she doing that to herself? Does she fear intimacy? Why? Is she frightened of f=rejection? Does she need to punish herself?
10 years of doing this to herself is a long time. She should give herself a birthday present, bin him, and get her life sorted.
I think she must know as well as we do how flaccid the two excuses she gives for this situation (a matching his and hers of non-sense) really are.
There is also the ethical dimension: this is clearly not a 'grand amour'. She is enabling the deception, in the sphere of profound intimacy, of another human being (his wife - and the children too, actually).
The man has lied and cheated for 10 years. He is actually not very nice, you know.
How do you make her see sense? I don't know. But I think the pressure you are feeling as her friend kind of proves my point that this affair damages (and limits) many of her relationships.
I'm sure you are thinking, right now, deep down inside, "How much of this can I take? Why doesn't she listen? This is too much."
It's too much because it's self-damaging behaviour, for 10 years, and undeerneath it are other issues she's not dealing with.