Disagree 100% that he is being controlling. She is completely out of line for a married woman. I dont necessarily think she is out cheating, but her behavior for sure is not appropriate. How would she feel if the tables were turned and it was OP staying out til all hours with a buddy, wasting way too much money and neglecting things at home?? Wifey has a choice to make, she either loses the toxic friend, or her family.
Then again, what is cheating?
She is cheating the husband and family out of their together time.
Parenting is tough, she is getting away from the home, the husband and the children in a potentially, destructive way.
Her behavior will, very likely get progressively worse. Right now, some are giving her the benefit of the doubt on what she does at these bars and at the friends home.
With her present attitude, that doubt, is undoubtedly worth looking into.
When she asked you if you wanted her to stop seeing her friend, had you said, YES, you would likely found out her true feelings.
You need to call her bluff. You will immediately know where you stand.
Does her friend have children?
What are the ages of yours? Little ones are very demanding!!
Some 'away time' from the family is stress relieving and good. What she is doing is destructive.
Those words out of her mouth, "you aren't my boss". Those words and thoughts originated from her toxic friend. Her friend is divorced. I can see why. Her ex husband probably tried to reign her in and she left her marriage.
Her friend is likely an alcoholic. Your wife will soon become one, also.
Then, she will, in truth, be married to the bottle, and not to you.
Keep in mind, when under the influence of alcohol, any boundaries she has will likely fall. If they have not already fallen.
I suspect cheating (at many levels) has already occurred, many times.
Remember, cheating can be kissing, touching inappropriately, talking trash about her family, flirting, etc.
And, taking excessive time away from the family "for not a good reason".