You are not being too sensitive. I don't think even that you were overly direct - this is a very risky situation. I don't allow my daughter to share a room with my partners son (they're both a similar age) as it's just not appropriate whatever his intentions or levels of curiosity are. You did right by her. It sounds like father is so intent on avoiding saying no that he's prepared to place another child in an inappropriate situation which is very wrong.