Another possibility is she thinks you got “too parental” considering that your relationship with her is still pretty new and you are not the biological father. In other words, she may like you offering a male influence but she might also be used to being the single parent and resent an “intrusion” into that territory. Can you speak with her to clarify what she has in mind?

It would be highly problematic if she actually thought you had a romantic interest in her daughter...are you sure that is what she was thinking? There needs to be clarity about that, at once.

There is potential to do a lot of good for her and her daughters but a lot of tact and sensitivity is needed!