Sounds like paternal transference, which is pretty common in therapy. Definitely talk to him about it, especially if you feel like it could hinder your therapy. I don't think it's too unusual for him to bring up his kids in relating to you--both my T and marriage counselor have brought up their kids before.

My T has kids my age (mid-30s), and I definitely feel a bit of maternal transference for her, though I don't feel like it hinders things too much. Well, maybe a bit when I've keep something from her because I think of how my mother would react to it. But then I've realized she's not my mother and is very different from her. So instead, it's more like she's the mother I wish I had growing up, at least in terms of understanding the mental health issues I was going through as a kid (anxiety, OCD from childhood, depression later on). And I think it's made our relationship stronger.

As for my marriage counselor (MC), he's like 12 years older than me and has teenage kids, who he brings up sometimes. I have fairly strong transference with him (more than with my T0, which we've also talked about. But with him, it's like a combination of paternal and erotic/romantic, which can be confusing (but apparently also not too uncommon). Talking about it was more awkward because of the erotic/romantic part (I had an individual session with him to discuss it). But now that it's been discussed and is out there, I think our therapeutic relationship has improved. Mainly, I think I've gone from having a somewhat unhealthy attachment to a healthy one, if that makes sense.

Anyway, sorry for going on so much about my stuff, but just wanted to share my own experience so you know you're not alone. And also emphasize how much talking about it can help. It sounds like you have a very understanding T, so I think he'll get it and help you through it.