This is a tricky one, or at least could be. The answer really may more be in the details. First off he's not hiding it from you, although he may not be providing all of the details. His actions may speak more to the type of man he is, and that part is good - or at least might be. But why is he doing this? That's where your concern I'm sure is. Is he trying to help his kids have a nice home or is he still way too attached to his old life? It may not even be his exW but his ex life he wants to hang onto. It may make him feel good to do these things for his "family"
You mentioned several times that you've never met her. Why is that? Just has never happened or by his choice to keep you away? She obviously does not have a BF?
I think you are right to question this. I'm not saying it should be a deal breaker but it clearly raises some questions. Have you told him how you feel and your concerns? I think more than anything, how he responds should guide you. From there you need to follow your gut. What does your gut say? Is there more here than he admits? Does he even admit it to himself? That may be the larger question? Would he or will he continue to do this after the kids are out of the house?
I may have asked more questions than I've answered although I suspect they are similar to the questions in your mind. Again, follow your gut here. If you think this is odd amd beyond what should go on, it probably is.
DonH Midwest Me 56 WAW-EXW 55 Met 11/95 / Married 5/00 Bomb 6/20/05 / She Filed on 6/2/06 / Divorced on 10/9/06 4 who'd qualify as GF since D & dated about 25 women since D