SGB, you did mention "specifically sexual" contact, though, not just boundary-blurring grey areas. Specifically sexual abuse and I don't think the absence of pain/fear you mentioned is necessarily making it any easier on the child, long term.
I don't see that an adult should be engaging in grey areas with a kid either. It's part of the responsibility towards kids IMO. Sharing a bed with an unrelated child, even if it's just for your own emotional satisfaction, is still not okay. A kid isn't really in a position to make an unhealthily clingy, needy adult back off and give then some space. Especially when he's paying their family's rent. But not as damaging as the more obvious (some might say likely) paedophilia, agreed.
I dunno, I just think he was totally screwed in the head by never having any real privacy at all worthy of the name. His life is genuinely tragic. And his poor kids - no mum, no money left, and now no Dad, either. Just famous because of a seriously bizarre conception.