I am going to be blunt and say that in my opinion your SO doesn't believe that you are going to follow through with expecting him to leave. He only said that he would leave because he thought you would change your mind. Same for sd. 

I would tell him you expect him to be gone by x date (soon) as imo he is going to get more nasty, manipulative and cause more drama.

I think he's a master of denial AND, since you've put up with so much crap, he thinks your tolerance for the drama of him and his spawn is endless.  So of course eventually all will be fine and you will let them move back in.

Have you considered couples counseling instead of you participating with YSD and SO? I think if you do that, it will just be more of you trying to drag both of them along in therapy.  Whereas with couples counseling, it can be about YOU and what you need from him.

Like Delilah said- he doesn't think this is something that you are going to stick with. He thinks that in a couple of weeks everyone can come home and in his head it will be the Brady Bunch or something. 

This is only slightly related but when exH and I separated, I wasn't really ready to talk divorce. It was a break. His PTSD was really bad, there were scary actions he was displaying. He moved in with my parents and me and our kids stayed at our house. In therapy he kept yelling at me saying he needed a date to come back home- I didn't know! I didn't know if our marriage could make it. I didn't know if I would ever feel safe with him. 

Eventually, his actions made it to a point where reconciliation was no longer an option. When I told our counselor at our last session that I decided to get a divorce (exH wasn't at the meeting) he looked at me and said- You are making the right call. That said a lot to me. I hung on to that when things got messy in our divorce. 

Couples counseling may be what you need with him. Leave SD out of it other than the fact that she has caused too much trouble to come back. 

I agree with what others are saying about couples counseling.  We were fortunate to find a counselor who understood stepfamikg dynamics as she was in one herself.   She was able to help DH and I get close to the same level, as truly we both needed to adjust our view on some things.  It didn't solve all our problems, but we both came away with more understanding of each other and the ability to communicate without being defensive and it turning into a fight.  That was probably the root of our problem, him (not) parenting out of guilt, me upset and resentful, and we couldn't even talk about it.   I fully believe that if we had not been able to get on the same page and more solid as a couple first, no amount of counseling we may have tried to do with his daughter would have helped us.    Currently I feel like he and I are good, but unfortunately the situation with his daughter was to the point that when she realized she didn't like when he started being more firm and consistent, she had a choice and "ammunition" to live with BM full time and treat DH badly.  Still in the mud and in progress and I hope some day it will have a positive outcome.  I wish you the best, you are in a tough situation and I hope it gets better!

he wants to patch the hole by putting something in front of it, moving said child out but he doesn't want to drywall it, plaster it and repair it, he just wants to hide it until you back down. He isn't looking for a fix, he's looking for a way to avoid doing anything. You deserve it to be repaired not hidden. until he actually works to repair it, nothing will change. I'm glad you're being your own supporter, good on you!!

As for her room, empty it, scour it, repaint it. It's YOUR room not her's. 

Maybe you need to be much more blunt with him and tell him that at this point you don't envision EVER allowing either of his daughters to live with you.  He clearly is not getting it.  I would also be very concerned about the fact that he's not spending his non-working hours at his parents' house with his kids.  I thought the whole reason he was moving in with his mom, instead of getting a place of his own, was because his children could not be left alone.  Expecting his mom to watch them while he's at work is a lot.  Sticking them with her when he's not isn't acceptable, and could very well result in her kicking them out, too.

I'm guessing by his behavior and what he's saying that he views this as a temporary blip, and soon you'll be back to handling his problems for him.

And when his lack of parenting/bothering gets on his Mom's nerves and she tells him he needs to find a different place will he circle back to you for a place to live. 

He's done nothing. He plans to continue to do nothing. So work on you. Make your life center around you. Take away his key, roll up his welcome mat, force him to deal with the messes he's made. Redo that room, change up your house to your tastes, take a class, join a hiking club, a book club, volunteer somewhere and build you back up. See a counselor and fix you. He's not helping fix you, he just wants to get his place of doing nothing back. 

So, I now see that he is not really taking this seriously and is not taking responsibility for his role in all of this. Not good.

When you first posted about them moving out, I was thinking it would be quite awhile before he moved back in, as in more than a year, maybe years (to get SD launched). He seems to think it's going to be a temporary, short-lived arrangement, which tells me that he agreed to the move for the wrong reasons. Seems as if he agreed to this move more to appease you than to actually do the work of parenting his kids.

You absolutely should clean out "her" room, as it is YOUR room and in my opinion, she should never be allowed to move back in. I didn't even think her moving back in was an option. It shouldn't be.

If it were me, there would no "until I see changes", or "until she does such and such". To him, that just means that when he can get YSD to do such and such, you will fold.

Again, he is not taking this seriously.

I have a friend who works for the Dept of Corrections, his degrees are in criminal justice and abnormal psych.  He says personalities are set by age 7.  I've done a lot of research and seen studies claiming personality is 70% inherited, and yes, personality is set at a very early age.  There is very little chance YSD will ever change.  She may mellow with age, but her narcissism will never be gone.

But hope is a four letter word, and keeps people engaged way longer than is healthy when it's someone they love.

I don't know about your DH, but mine is a very kind, gentle person.  He's extremely conscientious.  He's intelligent and tries his hardest to do the right thing in every situation, but in some cases he's just incredibly ignorant.  I used to be like him, but I've had a lot of experience with narcs over the years, and I've become a smart, hard person.  This situation has been very humbling for DH.  Because he's good and kind, all the world is good and kind in his eyes.  It's called Reverse Projection.

Before we realize the truth about the narcissist in our lives, we relate to them as if they are normal human beings possessing a conscience, integrity, and some degree of self-awareness. We trust their words because we don’t deceive and manipulate people, and trust that the people who claim to love us, will do the same. We give them the benefit of the doubt because we believe they truly love us, and no one, who truly loves us, would purposely say or do anything to hurt our feelings and us. We are, in essence, projecting our good qualities on to them, and when they don’t respond the way we expect a normal person would, we become confused and hurt, question our reality, and believe we must be to blame in some way. The problem is that narcissists don’t think, operate, or play by the same rules as us, and our failing to recognize this sets us up for manipulation, and misery by default.

http://www.freefromtoxic.com/2017/01/02/the-8-most-common-narc-sadistic-...

So years ago when Satan was heaping abuse after abuse on him, and then us, he continually, stubbornly, tried to reason with her.  He refused to admit that she could never see the light.  He said, "If I can get better, so can she", and I had to explain to him that the thing in his brain/personality that gives him incentive to get better, makes him want to be better?  She doesn't have that.  That's what makes her what she is.  She's a narcissist.  She doesn't have a conscience, or empathy, and she doesn't know there's something wrong with her.  She never will.  Naricssisism can't be cured.  They lack the motivation to get better.

He had a very hard time accepting that.  I had to repeat it over and over.  It was painful for him.  He felt like a failure.

So then when I finally threw in the towel on Killjoy, and kicked them out, at first he had a hard time accepting it.  He went through the grieving process.  It took time.  Sometimes the truth is too painful to face all at once.  I made sure to bluntly tell him that she could never come back here.  Not five years from now, not twenty.  Never.  She is a narcissist.  She's never going to be normal.  I'll never trust her, ever.  I had to tell him over and over.  He gets it now.  He did admit to me that early on he was hoping Killjoy would get better, and I would forgive her, eventually.  Tbh, he may still be secretly hoping that.  But he knows my position.

Kicked out means KICKED OUT.  I think you should limit your interaction with him for a while.  He doesn't need to come over so he has the opportunity to get upset you're cleaning out his kid's room a/k/a YOUR room since it's YOUR house.  Every minute he spends with you or talking to you on the phone is one less minute he's spending doing what he should be doing: sorting out his trainwreck of a daughter.  

Something to consider. BM has other kids. Half siblings of OSD and YSD that have admitted BM was abusive to them but didn’t turn out to be complete trainwrecks like OSD and soon YSD. They credited their dad and SM for that. So what was the variable that determined the difference? Their DAD! Their dad wasn’t a failure of a parent.