Thank you for contacting JustAnswer.
I am sorry to hear about the problems you are experiencing in your relationship. Unfortunately, extended family conflicts are a frequent cause of marital and relationship issues. This problem needs to be worked out in order to avoid it being a constant source of conflict between you and your fiancéé. You have done a lot to try to work on this problem already, by discussing your concerns with your fiancéé and trying couples counseling. It appears from your description that your fiancéé feels too guilty and perhaps anxious to stand up to his mother, since as you described, she is in the victim role. This puts him either in the rescuer or persecutor role.
Since the only thing you can control is what you do, you may want to consider ways in which you remove yourself from being in between his mother and your fiancéé. For instance, could you very calmly, respectfully XXXXX XXXXX of factly set limits with her? (This may also model to your fiancéé how to do this.) By expecting your fiancéé to stand up for you, you may be engaging in some of the same dynamics as are there between he and his mother. Perhaps you don't need him to be assertive for you. If you are able to set limits for yourself this would allow you to be in charge of setting the limits you need for yourself and would then perhaps lower your irritation with him and his mother.
Perhaps you could focus on your relationship with his mother in a positive way, for instance finding some common ground of things that might be positive to do together. If this would not be possible, then simply limiting time together, and thus limiting the opportunity for her to cross your boundaries could be helpful. You may also want to focus on some positives when discussing him mother with your fiancéé so that he doesn't feel that he has to defend her all the time. Are there any positives that you could see in her?
Unfortunately, if none of these things are helpful, then you may have to decide if this is a relationship that you are willing to continue with.
I hope this answer is helpful. Please let me know if I can clarify further.