According to the rules posted, as long as you were not a spouse or common-law partner at time she landed, and for this app the undeclared child is a dependent of the principle applicant (you) and not being directly sponsored themselves, then it may be possible.
In practice I have not seen this situation very often, in fact just the 1 case someone mentioned that the visa officer used this rule to allow the sponsorship. But it seems based on the rule your case should be allowed. I don't know if there will be any complications, or the misrepresentation on your step-mother/spouses's app (not declaring the child) will be an issue.
I am kind of agreeing Rob_TO on this. But it is a very tricky situation. I went to read both IRCC 117 and OB2, and it seemed that the dependent's child on a family sponsorship doesn't fall into the definition of a family member that listed on IRCC117 (1), but in OB2, the authority stated that the sponsor should declare all the family members and it should be the VO to determine if any of the family member will be qualified under IRCC117 (10), who would be allowed not to go throw the VO's inspection.
"As per R117(10), the exclusion of R117(9)(d) does not apply to an applicant where it is established that
an officer determined, during the course of the sponsor’s own application for permanent residence, that this applicant (
then a family member of the foreign national who later became a sponsor) was not required to be examined, as applicable, under IRPA or the former Act.
The key notion operating here is whether it was the decision of the officer who, being fully advised of the existence of the family member through the truthful declaration of the foreign national who later became a sponsor, determined that it was not required that that family member be examined and did not require that the family member be examined. If the decision for nonexamination was made by the officer, then R117(9)(d) does not apply in respect of that family member and that family member is not excluded."
My understanding of how the OB2 works regarding this situation is if you as a dependent (a foreign national) of a family sponsorship, you have a child (Then a family member of the foreign national), then the sponsor/PA has to declare the child, and the VO would determine if that child needs to be examined or not (Usually it won't be required (IRCC117 (10)). If the sponsor/PA didn't declare that child, and later the foreign national (the formal dependent) became the sponsor to sponsor his/her family member(s), then R117(9) (d) should apply to his/her family members.