New cat Big bully not what we thought

Hi! We have had a bit of bad luck with our kitties lately. We First had a male cat who died this July of cancer. We also have a 4 year old male who was very depressed after the loss of his buddy so we brought in a kitten. The kitten was great but kept getting sick. After lots of tests, treatments, and a surgery we found out he had FIP and died after only 4 short months with us. We waited 4 more months to make sure our 4 year old male did not have FIP and everything was sanitized and we healed before considering adopting again.

We ended up with our new cat who is a 3 year old male When we played with him in the playroom he went right up to my young kids licked them and was giving us all lots of head butts. We decided to bring him home instead of a kitten. They told us he was good with other cats and young kids and told us he was a loveable couch potato. After bringing him home we put him in the bathroom for a few days and then let him roam the upstairs with a 4 foot gate at the steps to separate the cats. Well he was able to jump over the gate to go to my cat and after hissing and growling they sniffed eachother and seemed like that would be all.

I locked the new cat back in his room when we left or went to bed so they were never alone and they did well eating together and after a day the hissing stopped. After the first week the new cat (still not loving up to any human) started becoming himself and started attacking my cat pulling hair out and my cat always surrendered. My cat jumped in the window and new cat would bully him away, food, toys, litter box, sleeping in a chair the new cat chased my cat away. The new cat also does not like my 4 year old. He hisses when she walks passed for no reason and even bit her. He is declawed and a biter and a big boy. Probably twice the weight of my cat. I emailed the shelter to find out they didnt have him very long he actually lived at a cat sanctuary for 2 years on a ranch in florida before they decided he was too friendly and sent him to the no kill shelter we got him from. Fishy story yes?

So its been 3 weeks now and my cat is getting tired of the bullying and starting to fight back. This has turned into less fighting but more vicious. No blood yet because I have been using a spray bottle now to stop it.
They can be in the sun room together content though and walk passed each other sniff and be ok. It is mainly with food, windows, toys, possession items.

I can handle the jumping on tables and making sure to keep all food up and I can handle the not friendly part running whenever we try to pet him but I am worried about my kids getting hurt again and my cat is really stressed to the point where he looks like he may be losing weight and isnt grooming himself like he should be. This new bully cat is starting to get comfortable here and has potential but I am not sure if our house is the right home.

Anyway after this long explanation I guess I am looking for advice. I have never turned a cat away before and after losing 2 cats already I am having a really hard time with this. Should I take him back or see if it will eventually work out? The longer I have him the harder it will be to return him but like I said he has potential. I feel like a horrible person for wanting to return this cat but he is nothing like the shelter said and they did say they would take him back.

My cat he is about 9 lbs and very friendly. We have had him since he was 6 weeks old. He grew up with an adult male and he is still very kitten like and active chasing toys. He isnt a lap cat and doesnt purr much but you can carry him all day and he is so tolerable of hair, tail, ear pulling and sleeps with my daughter. He likes to be anywhere we are and is curious and wants to sniff new people coming into our home.

The new cat is very strong, probably 15-20 lbs, loves to eat anything, is playful but very rough and strong. He jumps high he likes to lay in the sun room but likes to run around the house too. He will come up to the adults and rub our legs and let us pet him but then run off. He does like to lay around too. He is very territorial. Seems like he wants to be more friendly but unsure. I don't know much about his history except he went from a shelter in ohio to the florida cat sanctuary because he was unadoptable then sent back.

Do you think a kitten would be a better match for my cat? He did well with the kitten that died of FIP. Even cleaned him when he was sick. Would it be horrible to not give this cat a chance? Thank you so much for your help in advance.

p.s. I am a stay at home mom so I am usually always home.