Hi nixnox
Firstly I'm sorry for both you and your husband and also for your stepdaughter. You all are suffering through this period together. You and your husband care deeply but the stress is mounting.
I hear some pain and anger in P that she is not able to process yet and she is approaching adulthood without the emotional tools she needs to cope for herself. Cutting is a serious sign of mental health issues, let's hope that's in the past. It seems the counseling to date has not been as effective as hoped. I would think a teenager with counseling would have a springboard to approach life a little better than she is. She sounds like a tantrum is her "talking".
Her bio mother should not be a leader figure in her life until her bio mom displays different although P is 18 already. I believe P could end up abusing substances with her biological mom around her. Even is its indirectly.
She comes from addiction background and she is displaying addict like behavior in a sense of blaming, diverting, entitlement and inability to manage her emotional state effectively.
She will not change, she has no reason too. The talking is just that to her, talking. In one ear out the other and she still has a warm bed and full tummy everyday. She just has to display behavior when pressed a bit. All else is sorted for her. Because we show love but they see advantage.
Why not have a mini intervention style meeting with her but speaking out of love and togetherness more than "you outta or else" . She is old enough that the consequence is on her and she can ultimately move out if it doesn't work for you.
You and your husband must be a united front at all times with this - very important. She will play dad against mom if she sees a gap and derail her consequences. Say she is welcome to continue to stay in your home granted she follows the list of changes you require. Make clear HER behavior and choices is changing the relantionship and it is getting unbearable and unacceptable. Create a crises for her to change.
Put the ball in her court but in a way she is grasping the whole situation not just her parents are kicking her out. Give her a copy of the requirements and let her sign it so she has black and white copy that it really happened. Also make clear on the paper that if she doesn't change e.g you will start moving her out, take back her phone, no more petrol money, change the locks etc I.e the consequences. She will not be part of your lives UNTIL she had changed. You will pack up her things and keep it wherever you choose outside the home for her to collect when she sorted her living arrangements out. And stick to it. Parents want so bad to show love but we often need to show love by letting the real world do its work not just talking about it hoping they catch the drift.
This will also set the tone to her if she ever started drugs (the possibility in her history is high) what she can expect from your home.
Let me know what you honestly think of this suggestion. I have not been in this situation myself so feedback from your point of view would be interesting.
Best of luck.