Regardless of the children issues, this couple clearly seem to not put any stock into the value and necessity of poly relationships developing on their own and independently. The fact that she reads all his conversations with the OP indicates that neither of them feel the OP deserves any privacy in relating with this man.
Persephone, I would just stop holding onto any hopes that this can become a romantic relationship for you.
Plunk! Into the friend zone he goes!
Hot chick in the city.
Oh, oh, can't you see? Love is the drug for me.