Aha! I can see what you mean. My girl Pursley has bald spots on both back legs in exactly this position - I call them her sitting spots - but she hasn't found them tasty like your cat seems to have done.
I zoomed in on your picture, and can see that she's licked this spot from one side and is presumably constantly re-opening the wound. I think the bitter apple applied liberally to the remaining fur in this area will do the trick and stop her re-opening it, allowing it to heal.
The steroid tablets she was on previously (I understand her dose was too high?) may have helped to break an "itch/lick/itch some more" cycle ONLY if she had itchy skin. This particular part doesn't seem to have much response to tickle stimulation (I just tried it on Pursley - she blanked me) so those anti-itching drugs wouldn't necessarily work on this spot.
This is what I think she has - like biting your nails or twirling your hair - a habit that she can't break without help.
The Bitter Apple tastes exactly like the stuff they paint on kids nails to remind them they are doing it and stop it (in fact wasn't is called "Stop It"?).
I'd get some of this and give it a try for a few days, see how she gets on.
Her armpit may be her next "target" so be sure to rub some in there as well. Her tummy is likely to be the next bit. This is why I was asking about fleas, as they tend to settle in the warmest nooks and crannies like armpits and groin, which explains why cats with flea bites will routinely lick those areas bald.
I have a cat who habitually grooms one part of his flank, and nothing I do has ever resolved it. He doesn't habit-groom anywhere else - this is his nail-biting equivalent. However, he does have FAD (Flea Affected Dermititis) and even one flea bite will have him grooming all the fur off his tummy until he's red and sore. I may never see the flea but I know it's there when he begins this behaviour and the only way to treat him is with topical flea treatment (I've switched from Frontline to Effipro as Frontline stopped working) and start the Bitter Apple.
My other over-groomer has a grain intolerance - he seriously overgrooms if he gets fed regular cat food containing cereals (such as Go-Cat). These foods negatively affect his calm which causes him to become nervous and defensive/aggresive. After switching him first to Applaws (which he quite liked) then James Wellbeloved dry food (which he loves) he is back to being my big softee and has all his fur intact once again.
As you're already on JW food (which may take a few days to show results) try the Bitter Apple.
Gill makes a good point too, any small change in her lifestyle might be causing her to stress out. It may also be something you're doing that is upsetting her (she may, for example, be stressing over her vet visits and associates any attention from you with that distress).
This is an extreme example, but once again I have an ex-feral who takes a good month to forgive me whenever I have to trap him for a vet visit. I just have to rebuild gradually and resist picking him up and fussing him as he just hates it.
You may also find that as the girls mature, there's an Alpha Female argument bubbling underneath which may be creating stress you can't see.
Zylkene is a milk derived anti-stress treatment which you sprinkle over food or in cat milk. I've had really good results with de-stressing (we have eight cats, three are ex-strays, so it gets a bit tense at times) better than Feliway. If the diet and bitter apple don't work after a couple of weeks try a few days Zylkene treatment - it may make enough of a difference to help her.
I get all my meds on-line from Animed Direct or VetUk.
