Caring for a disabled mother-in-law who is extremely abusive and controlling: How do my partner and I cope and set healthy boundaries?

I apologize for the long post, but I'm at a loss on how to proceed.

I recently moved across the country to start a family with my partner after a year of long distance. He is wonderful in every way, however his mother lives with us as she is considered disabled. She is extremely abusive/controlling and blames her disability when we try to set boundaries or address her behavior. She's independent enough to care for herself, clean and use power tools for yardwork despite our objections.

She has been this way her whole life prior to any disability according to my partner, and we're unsure what her actual diagnosis is. She called him after decades of no contact saying he was now responsible for taking care of her, and without any other living family he felt he had no choice. She receives state assistance but not enough to live off, and she's independent enough to have her own bank accounts so there is no guardianship or POA. When she came to live with him, her paid-off home he grew up in was being foreclosed and her car was repossessed to help pay off tens of thousands in spending debt she had racked up, her 401k was gone. The rest my partner paid off himself.

There is an extremely unhealthy dynamic of guilt and abuse involved, and she does not hide her dislike for me. When I first moved up and joined the household, I tried to connect with her through shopping trips, coffee dates, shared interest of gardening and crafts, etc. but when I started my career and couldn’t take her out or spend money on her she changed completely.

For example, she recently screamed at us over him not texting her back to communicate what our dinner plans were (partner and I tried to deescalate as we are renting and have neighbors, but she is inconsolable and only escalates further). He and I both work full time 50+ hours per week and pay all the bills/groceries, and he works a high stress job at a hospital in the OR. He's not even able to take a break most days, so her expectations are completely unreasonable and controlling. She also will take his car without permission even though her license has been expired for 5+ years, and there's no telling her no without a huge outburst.

He used to shut down when she explodes but has been doing more to try and "greyrock" while setting healthy boundaries, and he's becoming more aware of her abuse for what it is. Nobody else was ever around to witness it - he is an only child and she's single, so it's been easier on him to just concede to her behavior to avoid conflict. He feels responsible for her behavior and constantly apologizes to me for it. As someone who had an abusive father, I've been gently trying to reinforce that he's not responsible for her behavior nor is it his fault, and he deserves a peaceful home.
I tried to set a boundary that we would not continue any conversations if she continued yelling and being aggressive (she will bang on our bedroom door until we answer her). She called me manipulative, narcissistic, smug, sarcastic, and a b***h repeatedly, and then threatened to slap me across the face. Her next words were that she "knew exactly how to take care of the problem" in reference to me, which is terrifying.
I don't know her well enough to know what she might do as I've only been living with her for 3 months. I told her as calmly as I could that I would not tolerate threats of violence and if she did it again, I would report her to authorities, and we would find other options for her housing. It feels extreme on my part, but I don't know what else to do as it's not the first time. I don't feel safe having my cat around her, let alone any future children. My partner and I dread going home and feel trapped and drained. We don't make enough combined to support a second lease.
I love my partner and do not want to leave; we both deserve happiness and a future together. Despite her abusive behavior I do care about her health and wellbeing. What can we do?