The problem is, all our replies are generalisations, because we have not even met the people described in the original post, let alone knowing them well or in any case being able to recognise a potential molester. Blanket horror at any bedsharing is a bit OTT. The details make the difference.
It is quite true, as Hetty said, that in many cultures, it is the norm for parents and children to sleep in the same bed, and in others the norm for sexual activity to take place in the surrounding countryside, not in the crowded shared bedroom. In these cultures, is it perhaps also the norm that people don't change partners as often as the OP's account?
In this case, I think the social work dept needs to be aware of the situation, and the child's mother needs to be told clearly of the rules she needs to keep to if she wants part custody. The father and grandparents should be careful how they report it, though, or she could claim that they are blackening her reputation to get control of the child.