Sorry long lost!

Okay so I need some advice because I'm not sure on what else to do or who to talk to.. I've been with my boyfriend for 3 years h has a 5 year old son. It's been a rough road this child's mother is CRAZY and has caused so many problems so it's almost like I'm already distant with this child just because of that and I know it's wrong and I WAS working on that but then.... about about a year ago we were at my moms my sister and her son were there (my nephew was 3 and my step was 4) and we walked in the playroom to find my step butt naked standing over my nephew my step was embarrassed and knew he was wrong and my nephew said that's how my step said you play doctor!!!! I was livid and concerned. My sister was mortified and doesn't allow them to play together anymore. So on the weekends he's at our house we stay clear of any family gathering. It's almost been a year and I thought "okay that was a phase we spoke to him he knows it's wrong and that's that they will be fine to play now" UNTIL I received a text from my steps aunt saying she walked on him having her daughter (3) KISS HIS PENIS!!!! Clearly this child needs help! He lives in a one bedroom house with his mother and her boyfriend so I'm sure at some point he has seen or heard things he shouldn't but I am completely distraught. We are pregnant with our first son we live in a 2 bedroom house and I don't even want them to share a room at this point!! I'm concerned but I'm also completely disgusted! I tried to talk to my boyfriend about but he completely shut down and immediately got defensive and upset. He already doesn't handle emotions well but this is something that cannot be over looked. I love my step son but now I'm a mom to a child that is biologically mine and it's my job to protect him from anything bad or harmful. I just don't know what to do I'm so emotional and I don't know how to approach the conversation gently with mySO. Someone please give me some advice!!!!! It just seems like it's not a phase and it's not going away..

Thanks in advance!