Turns out the cracks in the caulk weren't from settling - they were from water damage. The tub was not level - it was tipped forward and out. Not only that, some of the liquid nail wasn't applied well and there's a bulge on the long side of the alcove, making recaulking a difficult task. The water run off was damaging the dry wall right at the edge of the tub too, causing an unsightly gash to appear.
I found a stop gap solution in theses plastic corner shower guards for most of the year, but it gave out finally and I had the choice of trying to strip everything and recaulk - knowing I'd have to do this again and again - or fix it for real.
Fears of needing to touch the subfloor to level it and lack of budget made this difficult to do, but after some research, I found out that when replacing the tub, it can be leveled out, and I can also tile the walls while I'm doing this to get rid of the ugly acrylic wall panels. I wasn't budgeting for this yet, but it had to be done, so I say goodbye to my car fund and off we go.
I found a well rated full service contractor through ServiceMagic and originally they were going to use white tiles with a feature strip of my choosing. I don't have anything against white - I just didn't want a white wall. I already have a white floor and don't have the budget to redo that right now, so white and white wasn't going to cut it. I shopped around and found this combination.
The idea was the blue cloud swirl tile would be the base tile, and there would be a strip of 3 square tall of the mosaic across all 3 walls of the alcove around eye level. I've always wanted a seashore feel so I thought this combination was perfect.
We place the order, everything seems great, then a few hours later the tile place calls back and says sorry - the blue base tile is discontinued and their supplier doesn't have any left in stock. AAAHHHH!!!! I even did a search online for the distributor - they're in Malaysia. I email them and they replied that style had been discontinued for years, so they don't know of any US suppliers who might still have some left over stock. Drat!
So I run around to find more tile samples, and because the contractor was supplying two corner marble shelves that have grayish veins, I thought this combination (from Home Depot of all places) would work best. It would just be the plain base tile without the decorative trims. Home Depot guarantees 7 business day delivery so we place that order.
So the demolition was pushed back a day, since the tile wasn't around to install anyway. It didn't take long for the crappy dry wall to come down.
They put in cement boards and new tub while we waited for the tiles.
The next day, tile work was on going while I was at work.
By the end of the day everything was done except for new shower head, curved shower rod, and some odds and ends. We needed to wait to install the new shower rod since it required drilling through the tile, and it's best to do that after the tile has settled in and completed dried. So I kept the tension rod I had before in the mean time.
Today, they came back to caulk any cracks that appeared from settling, and installed the rest of the hardware, including move the glass shelf up a little and installing the originally oddly placed towel bar beneath the glass shelf.
So, after 2.5 cumulative days of contractor labor, 3 base tile options, 6 trips to different hardware stores, 10 trips to different tile stores, over two dozen calls with the contractor and several thousand dollars later, I finally have my new tub and tiled alcove with shiny marble corner shelves. I'm in awe of how caulk can get on absolutely everything in the bathroom and I've mastered scrapping excess dried caulk off of tiles and tub surfaces with a razor.
I can't imagine doing this on my own as a DIY project, and having it last multiple weeks. I don't have that kind of stamina. So I guess I will always be paying the premium for a place that requires no work, because I don't want to do this again.