Hi Collect,
As a step parent, you are really in a hard place. It is a thankless job, being the one who is clued in when everyone else is in denial.
You seem to have good instincts. I think that you should trust them. I don't know how you can convince any of your family members to take your concerns seriously. It is too easy to make the step parent look like the bad guy.
Thank goodness your daughter is no longer living in the same household with the step daughter.
If the step daughter were to get a position working with young children, hopefully there would be adults supervising the situation? It is hard to know when it's appropriate to step in. The safety of others is important, but it's very difficult to get others to acknowledge the problem.
You can't fix this girl on your own, but at 16, there are many possible explanations for her behavior. She may have any number of disorders.She may improve , or get markedly worse.
Sorry you are in such a hard spot.