I'm on the same page as Garlick as it occurred to me that the 25yo may have honed in on the OP's 18yo and as they could, effectively, be in the process of grooming him/her I would like to know more about the activity that, in the OP's words, will cause "their paths to cross again very soon".
Is this an activity that is mainly for young people or is it for all ages, Soggy?
Would you describe your 18yo as being emotionally needy or streetwise? Is this the first serious relationship they've had, or the first sexual relationship that you know about? How long have they been in a relationship with the 25yo and do they otherwise have an active social life with friends of both sexes?
Did you have any reservations about your 18yo keeping company with a fully fledged adult, so to speak, or did you feel that their relationship was one of equals? You've said that the 25yo "was very well liked in our house". Could it be that you've been taken in by a seemingly well-mannered and respectful individual whose intentions are less than honourable?
You've gone on to say this has shown you that your 18yo is "VERY naive"; they've "insisted it was a joke" that was "never meant to be taken seriously", that you "don't believe for a minute they'd have gone through with it" and it was "more like a naughty titillating idea with the dp".
You've also said your 18yo "owns their mistake & is devastated at the impact of it", that nothing you say "seems to lessen their own self-hatred right now" and that you're "worried they might self harm". Does your 18yo have a history of self-harming and, if so, could they be described as being a vulnerable young adult?
I note that your 18yo lashed out at you for bringing it "out in the open" and that they're blaming you for "ruining their happiness". If this was a joke, albeit in bad taste, made to your 16yo as part of everyday sibling banter I would have expected them to be lambasting their sibling for not being able to recognise or take a joke rather than exhibiting the degree of anger and "self-hatred" you've described.
Without a backstory it's not possible to assess whether you have could have done more during the time(s) "lots has gone wrong" for your 18yo, but I'm wondering whether some of what has 'gone wrong' may have to do wiith acts they may have been coerced or manipulated into by the 25yo such as sexting, sending nude photos of themselves, or being filmed in compromising positions/situations perhaps in the company of others.
I don't say this to alarm you as it's not uncommon for unsuspecting young women who believe themselves to be in love to be taken advantage of in the worst possible ways by unscrupulous men, but it seems to me you're best advised to give your 18yo a lot more 'supportive cuddles' and initiate a lot of non-judgemental conversations in order to get them to open up about this relationship so that you can be assured that they're not being subjected to sexual abuse and/or extortion of some kind or another but are too scared to tell you for fear of the possible consequences, real or imagined, of doing so.
Given that you haven't mentioned a Mr Soggy, I'm assuming the onus will be on you to confront the 25yo at some point in order to make it clear that you don't want them in your home again and that if they make any attempt to contact your 16yo you'll report the matter to the police, and/or have a chat with whatever adults organise the activity that they and your 18yo engage in.
As tipsy has alluded to, there's opportunity here for you and your dc to strengthen your bonds and deepen your understanding of each other and, with your firm hand steering the ship through these temporarily troubled waters, it's to be hoped that they don't turn on each other or come to believe that you favour one over the other.