So anyway, I am just wondering, how can one refute this insidious and evil heresy?
You should not even attempt to do so, your efforts will be fruitless. The situation is complicated on so many levels.
First you'll have to establish that the most minute statements from the Roman Pontiffs, even those that amount to mere hearsay, do not constitute heresy. Then you have to go through a point by point defence of the Second Vatican Council. Then you have to get into the nitty-gritty of magisterial authority, when and where the Church is infallible or fallible (and this is not as black and white as you may think at first). Then you have to completely tackle the thesis that an heretical pope would lose his office. If you had the time and the patience then you could just cut to the heart of the matter and dismantle Saint Robert Bellarmine's opinions on heretical popes losing office. That is pretty much the foundation of Sedevacantism. If you concede that a pope ceases to be pope when he embraces heresy, then you basically give them all that they need to hold obstinately to their beliefs.
Honestly, the best thing to do for sedevacantists is to pray for them. They are an odd combination of extreme ultramontanism, clericalism, and a paradoxical mix of astounding ignorance and genius. They've intellectually pinned themselves into a corner and they live by the letter of the law, as it were. Only grace can move their hearts now.
Many of them are simply confused. They see how the Church is in today's age, and they see the glaring disparity and discontinuity between the bishops and popes of yesteryear and the bishops and popes of today. They're scared. We have to be gentle with them.
They are not heretics, but they are in schism.
I'm not sure, I think you can make an argument for the fact that they might indeed be heretics. It is an article of the faith that the local Church of Rome can never fall in to corporate error. The local Church of Rome will never embrace heresy. But according to the Sedevacantists, the local Church of Rome has done just that. If the Diocese of Rome has fallen and no long exists as a visible and orthodox institution, then the entire Church has fallen. If they deny this doctrine, of the impeccability of the local Church of Rome, then they're heretics.
Yours in Jesus and Mary,
Mary's Bhoy.