"I don't know how I feel about this" is the strangest of all feelings.
Your post is thoughtful FS, and tbh I sense more of a generalized malaise than one specifically about him. A Covid related malaise maybe we are all feeling.
You are doing well with your Ds. If you can stand it, I think it's okay to say to them first, "Did you meet Daddy's new friend the other day? I don't have any questions, but I want you to know it's not a secret because we don't have secrets in our family. We all do our best to be honest and loving."
I'm sorry I haven't been here. I've lurked a bit. I'm in a cocoon state. Something is shifting, and I don't know what, so I'm quiet. It doesn't mean I don't care because I do. Thinking of you.