Dear Frustrated Sister-
There is absolutely nothing petty about your concerns! Telling children that a man is their biologic father when he isn’t is deceitful, confusing and very painful to children. Besides these, it’s wrong.
Teenagers in particular are very vulnerable. The teen years are a time when children are moving from childhood into adulthood and a large part of this transition involves discovering their own identities. They need to know who they are becoming, what they must leave behind and how to find their own voices, thoughts, beliefs and decisions. To cause a teen to be confused about such an integral part of who they are biologically is cruel. It’s like taking a stick, inserting it into their brains and stirring around their thoughts and beliefs.
You are right to feel angry but more importantly, you need to figure out what you can do for these kids. First, ask your brother IF he is indeed the biological father. Ask privately. If he says that he is, then tell him that this should never be a public issue (as his wife is making it) but a very important and private one. If he is the father and has not been involved until now, he has some serious explaining to do to these two children.
If, however, he is not the biologic father, as you believe, then you should challenge him to teach the teens to live with truth. They know what’s up. Having his wife play this charade exposes that she is a liar, makes them not trust her and most importantly is cruel. I promise, if she is perpetuating a lie, it will come back to haunt her and him in huge ways. She might well lose her kids over this.