Why does she not but a bed time routine in place, dinner, bath, book and bed?
This girl is 11...at that age I had started my periods, and spent most of my spare time with friends discussing potential boyfriends (all very innocently at 11, but it was only the next step away from kissing them, and then more by the time I was 13)
The maturity levels of an 11 year old are usually quite a lot different to a 9 year old. And you really wouldnt expect them to have the same bed time either.
Nor would you expect a parent to be laying with them every night until they are asleep.. that is just unnecessary, and inappropriate too.
I wonder how much time the OP spends on her own with either of her daughters, as it certainly sounds as if the husband is doing his best to ensure there is very little private time between mother and daughter. Again, another red flag.
The 11yo is likely to be full of resentment for her mother, for abandoning her almost from birth, and then getting her back but as a stranger into a ready made family. An 11yo is not going to understand a mental health issue, or understand why her mother thought her education was more important than looking after her child. (I dont mean that harshly, but that is how an 11 year old will see this). So, 11yo finds a way to get "revenge", on both the younger sister, and also her mum... by becoming a little princess in her stepfathers eyes.
In this scenario, a normal man would see the signs, and would be at pains to treat both girls equally, and make a point of showing unity with his wife, and this is where the OPs situation gets more dangerous, because in this instance, the husband is on some goddamn ridiculous psychobabbling wave about reincarnation ... or so he says... while also completely enabling the eldest daughters behaviour, in fact, encouraging it. The question must be asked, why?