The problem is, nobody is "engaging" her. Nobody responds to her at all, even when she is speaking directly to them. Nobody emails or texts her back, but she keeps doing it. So your theory of stop engaging her and she will retreat into herself is not the case here. NOBODY responds! Nobody but her is actually doing anything in this situation. So how are we engaging her? Her neighbors across the street can simply be playing in their front yard with their little boy and she will come out and start screaming at them to stop looking in her windows. Again those neighbors do not respond to her, or even look at her. But she keeps doing it. At what point is it harassment by her? Getting emails about "you will all be responsible if something happens to me" and "all of you who are in on this are going to be exposed" - that is not ok with me. Accusing me of putting pig and dog lights on my car and house to torment her are one thing. Emails with threatening tones are completely another. The last one said my son is going to figure out one day what I have done and he is never going to forgive me. Leave my kids out if it.
Again, I do not block her because I prefer to know when she is having her delusions. Things lately have gotten much worse, and I prefer to know that. I makes me feel safer knowing, rather than wondering what is going through her mind. I do not respond to her, ever. We did end up emailing her husband and letting him know about the texts and emails we have been getting and that we want them to stop.
Her son and my son play together and he is always welcome at my house and is over several times a week playing basketball with the neighborhood kids. So I hope that he feels we are a safe place.