Id be out of there, period. I HAD a relationship with someone who remained great friends with most of his x's, this didnt bother me, because they were at a point in their lives where there was NOTHING no emotional ties, but friendships. I personally do NOT have contact with ANY of my x's, for my own emotional wellness. Your situation is rocky. HE cheated with YOU on her, wouldnt that send you red flags right out of the gates???? Why would you get involved with someone who was already committed to someone else? They may very well be just friends, but the sneakiness would piss me off. Id talk to him about it, tell him youre fine with them being friends, but youre uncomfortable with "time" he spends with her. I would be prepared for some back lash on it, so think about how you want to say what youre feeling without "attacking" him. Personally, I wouldnt stand for it, from what you say, Id be kicking his ass to the curb. Sounds like he wants his cake and eat it too. BULLSHIT!
everything happens for a reason...beginning to wonder why.