Hello Jaynie.
A very insightful post and some great thinking points. I've been in this situation and I did walk away, the quote you reference about narcissism vs objectivity is really interesting to me. If you have been in a toxic environment from birth, because of the way that you have been taught to see things from a young age, many of your perceptions become skewed and if you are in a forced loyalty to said toxic environment for a long time, it is actually very difficult to see things, people and interactions objectively.
Unfortunately this is also where the toxicity get repeated down through generations - it's learnt behaviour and can be extremely difficult to re-write your thinking patterns. It takes a lot of courage and while yes, it can be seen as a victim mindset to be deeply affected by the trauma of it, it's not impossible to overcome, but it takes a lot of time, honesty with yourself and you literally have to build up your own self esteem from scratch. This is a tricky part of recovery because it's basically erasing your core beliefs and having to build new ones.
Walking away from toxic people, especially if they have been a part of your life for a while is only the first step and the response is almost always a smeer campaign and character assassination. These attempts can range from simple gossip to threats of violence and sometimes they need to be dealt with on a case to case basis because it's not always possible to simply ignore them.
The bitterness embroiled within the toxic/narcissistic person's mind generally doesn't change because unfortunately many of these types actually enjoy inflicting harm on others, I personally think it detracts from their own inner hatred by projecting onto others and if they can keep others below them, then they somehow feel better about themselves. It used to make me really angry, but now that I walked away, it just makes me sad. It must be a horrible way to live.
Have a good weekend. Cheers.