Because he is a coward.
Because he wants to have his cake and eat it too - ie. your "wifework" on tap around the house and for the family (emotional support for him and daughter), but without the financial or emotional commitment of a marriage or a romantic partnership - thus freeing him up to find that romantic partnership elsewhere.
Because he doesn't want to disrupt his daughter and knows your domestic labour around the house is giving her a safe and welcoming place to stay when her home life is unstable.
Because he thinks you'll take this "better" than him breaking up with you.
Because he's an emotionally manipulative asshole.
Because he's a people pleaser who is desperate to say anything to keep you happy that still means he can not have any expectation to have sex with you, hence he can have sex with others (since you guys are no longer in a relationship).
Lots of possibilities. But the one thing that is consistent is that he's following a script. The whole "I love you but I'm not "in love" with you" is a universal line. There's even a cartoon of it on the Chump Lady website. He may not have cheated yet (though "connection girl" surely ranks high up there) but he's obviously laying the groundwork for him to have a relationship with someone in the future that isn't you, and where does that lead? Does she move in? Does he move out? Do you keep doing the emotional labour with him and the kids while this happens, and for what in return - the right to be a precarious lodger in his house, whose right to remain there depends solely on how he's feeling any particular day?
It doesn't matter why he's doing it, all that you can do is decide whether you're going to accept this state of affairs.