What was their relationship pre split? Why the hell did he agree to her calling him daddy if there was the remotest possibility that he would not bother with her post split? Urgh, what a shit.
I would remind him that terminating contact with your eldest will impact the relationship that your youngest has with her sibling and the relationship that he has with his biological child.
Firstly, clarify if he really intends severing the relationship with your youngest post split. Secondly, what about the relationships she has with his side of the family, will those be ending too?
If the answer to one or both of those question is yes, then you are going to have to tell her that your Ex no longer wants to be her pretend daddy. This isn’t a reflection on her and sometimes adults make decisions that are really hard to understand, hell you don’t even understand it. However, there’s nothing that she or you can do to change his mind and as difficult as it is, you have no choice to accept (not agree with) his decision. Remind her that you love her very much and that you will always be in her life. It’s going to be very rough and you are going to be a broken record (write doen what you are going to say because you will be repeating it often and she will be very attuned to any changes in your story).
My DD is now 13 and her Dad terminated contact 5 years ago, he has since had a ‘do over child’. It’s been hard but we had the support of a fantastic child Phycologist who also supported DD through trauma therapy (DD witnessed her father assault me when she was very young). Despite some initial hiccups her paternal grandparents have been stellar and despite living 2.5 hours away and in their early 70’s, treat DD like their other grandchildren. Fortunately, DD’s Dad lives abroad so he is, for the most part, out of the picture. It’s going to be very rough for you and your children, don’t forget to include your youngest in the conversation because someone as spineless as your Ex could well tell your youngest a lot of bull in order to mitigate his behaviour and or to blame you.
Good luck and I’m sorry that your eldest is being let down.