Well, he may be basing his perspective on his own social experiences, and not really comprehend the rock-stable motivations of a sociopath toward their own personal interests, regarding which his apparent "mutual relationship" with her may be quite irrelevant--having already been put into an "as long as I'm getting what I want from him" mental compartmentalization. And, as another poster noted, he's probably not the first guy this little play has been enacted for.
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ok, think about your last sentence there...if that's true, and something untoward happened to some previous unfortunate who had been given transitory permission to enjoy the kids and later was somehow removed from the equation, then why would the mom still have custody of the kids? in the ensuing investigation, it would have come out that the mom was, at least initially, complicit in the activity, and therefore the children would have been removed from her oversight.
ultimately, one side wants to believe one thing because of a bias towards the relative morality of the situation, and the other side wants to believe the opposite for the opposite reason. conjecture regarding the mom's motivations won't resolve the stability issue; she must be sounded out.
Why would they be removed if she simply lied entirely about having any knowledge of it? Where would the proof of any statement even arguably untoward be?
If she acts in mock horror to what she previously encouraged, she, the mother and the woman, will be believed. The man will not.