I'm really sorry for what you're going through. I have no relevant experience. It certainly sounds like he is seeking 50% custody just to be vindictive . . . and possibly to reduce how much money he has to pay in child support. It also sounds like he can legally get his way.

Here's one hope I would hold out. Once the divorce is a done deal, he may have a lot less interest in having those kids around than he's now claiming to have. He'll probably cancel out a lot in picking them up. So I think you'll end up having the kids a lot more than 50% of the time. I would recommend you start a journal on just what all he does to be involved with the kids. After the divorce, continue that. Keep a record of his cancellations, which I'm sure you'll be dealing with. Then, at a later date, you might be able to petition the court to reconsider its decision. The journal could be your evidence that he does not invest much interest in the kids.

I would agree that the kids are likely better off to be with you all the time. Keeping your 8 year old up till 11 pm is not good parenting. He does it because it requires no effort on his part.