This is an issue I also have with my SIL. She lets the men she's had as partners become overly involved in her kids' lives telling them off, solo childcare because it helps her and staying over very early on. One man was very vocal in telling off DN harshly within a couple of months and it rubbed me up the wrong way. DH and PIL felt it wasn't their place to comment but noticed it too. Fortunately it was over a couple of weeks later although, disappointingly, it was him who broke it off so she's not seeing the red flags or is ignoring them.
Red flags in your situation would be the homophobic comments, rough housing and drop offs - is he definitely being dropped off? Are you in contact with DN's dad? If so, it would have to be something you navigated extremely sensitively to avoid a massive fall out.
Firstly, can you get any time alone with your DN to chat and see how he's doing? 'Side talking' whilst doing an activity like crafts, baking, playing in the park, etc. is good to get an unfiltered response from your DN.
Be mindful that he might not see the red flags himself but get a general feeling. It might be a feeling he's voiced and been told by your own DSis that it's nonsense or he's had a general impression he can't say anything negative. Reinforce the fact you're always on his side and believe him, he can be open with you. Don't make big promises like you won't tell anyone because if he does disclose something, you'll have to report it and he'll never trust you or potentially other adults again.
I wouldn't wait to discuss concerns with NSPCC and perhaps do a request under Claire's Law.
Unfortunately, step dads are a huge risk as recent cases have shown. I'm pretty sure it's one of the trauma risk factors. Trust your gut and dig with this. Sadly, we can't all rely on our family members to be the people we hold them up to be and you may find yourself even more disappointed in your DSis than you imagined.