You are right about the kids just needing their dad around, not necessarily interacting with them every minute but just being there. Months ago my H seemed to think taking the kids to a movie once a month was all he needed in order to be a good parent.
So you mentioned the extra room thinking maybe your H should move back in there? I have a live-in separation situation with an MLCer and it is dang hard. You have their moods in your face all the time, and there were several months where my H was basically never home, except to sleep, and that was extremely difficult, having to wonder where he was, etc. Once I learned to detach that became easier, but it has taken a long time. I just wanted to throw that out there. That being said, there is the possibility he would be around the kids more. It sounds like he isn't ready though. He knows that room is there if he feels he "can."