Dear OP
MN is not necessarily the best place for advice, sadly, many posters tend to show a lot of black & white thinking & appear to be quick to judge & spat out their own opinions & trigger responses without any of the following statements of actually knowing//understanding or experience of such situations or even own qualities such as a warm non-judgmental attitude with an once of empathy or compassion.
Reading through some of theirs & your responses, I personal believe that you know deep in your heart that this one off historical event does not define your husband as a sexual predator or threat to you or children.
Only you know that your DH has proven his integrity throughout your marriage & as a parent.
Your DH has owned this disclosure & he has been open to face the options available if his DS wanted him to.
(I certainly don't believe this to be a punishable offence, & no doubt your DH has secretly punished himself over the years)
He has not denied the facts and he has shown, honesty, transparency, remorse, shame & remains respectful of his sister.
Naturally you will question his credibility & look backwards to see if there is/has been any missing signs, yet I'm guessing there won't be any...... as a one off bad decision/act/event does not make you a bad person.
Reading in between the lines, I'm guessing your DH is reeling with guilt, shame & regret for acting on a one off strong hormonal surge during adolescence. It's a normal response & this situation happens more often than not with siblings, cousins & or friends in childhood & adolescence. None of the above will make these individuals sexual predators.
(We as women know how hormones play a huge part in our lives, how often do we act out on a monthly basis?? Without any ability to control our responses) this is no different to an adolescent male experiencing a high surge of testosterone!! If anything, your DH learnt to control his responses after that one regretful moment. To me this highlights his integrity & definitely is not a sign of a sexual predator. Regardless of that one off event.
I appreciate his sister has been struggling with the reoccurring memory of this event & something in her personal life has triggered her to speak out & no doubt as the younger female of the 2 it's easier to shift her own natural sense of shame & anger onto her DB assuming he should of known better as well as the fact that he instigated the incident, (btw I'm not blaming either of them) This was not sexual abuse in any shape or form, it was merely a sexual exploration within adolescence & they need to find a way to honour the peace & acceptance that this past event has impacted them.
They both owe it to each other & to themselves to see the bigger picture & not hold onto the public's quick judgment.
Acceptance & forgiveness towards themselves & each other will help ease their guilt & shame & allow you all to disregard the prejudices that are no longer warranted.
Final word, 'trust your gut instincts', the heart & mind can cause tricks on you as well as the negative MN comments.