I Don't think he is ready.  You are his "transition " partner.   The first after a divorce.  I say stay friends but look elsewhere for a spouse.  

He is totally overwhelmed. He needs to sort his life out, get his priorities in order, and learn to manage his time. He is not nearly ready for a serious relationship. Do not allow yourself to be sucked in to help take the pressure off his shoulders. He needs to realize that he has two absolute priorities in his life (his kids and his job) and all the rest is optional (sorry!). Once he gets a handle on those he can start thinking about music and dating. 

Yeah, he's not ready to date, much less be in an actual relationship.

How long has he been divorced? Maybe he is feeling guilty that he is spending a lot of time with you and he thinks he is neglecting his children. Maybe he realized the conversation you had was premature and he's trying to move slower. Consider giving him his space, while keeping your options open. You shouldn't have to wait around until he figures things out. 

On ST, people often ask, has he done the work?  What they mean is, has he established a home the kids are comfortable coming to, does he act like a real father instead of Disney dad, does he have a workable relationship with BM.   If a man hasn't "done the work", it's hard for a new woman to come into the relationship.

It sounds like he's done a lot of the work but needs to work on the time management issues.  I'd throw this one back, you dont want to deal with these issues which are presently someone else's problem but would become yours.  Also, in my experience, people can always find the time to do what they really want to do.

I don't have much to add, just one thing jumped out at me, I would never jump into living together with someone unless we had already had several decent fights. You need to see what kind of man he is when he is angry and how skilled he is in resolving  things. Some guys turn into a diffent person in a fight and this is not something you want to find out after you already moved in together and entangled your lives. 

It sounds like he is struggling to make his life work the way he wants it to work.  He has a lot of competing parts.. his own wants.. like band.  The things he HAS to do.. like earn a living.. the primary OBLIGATION to care for his children.. and then there is the romantic desire to have a girlfriend.   

It's tough to have it all.. and to some extent what you may have seen as "instant chemistry".. may have more likely been the rush of pheremones and his year long absence from much intimacy driving things.. sometimes people rush past the red flags.. because they want something to work. it's exciting and new.

Now, that he has sobered from his love drunk phase.. he is seeing some real conflicts in his ability to have all he wants.  And, I'm sure that his band asking him to step back is making him question what he wants.. it hurts to be rejected like that.. and to an extent, he may blame himself for short changing them so he could spend more time with you.. not that you asked him to do that.. but it is what it is.

But, as an adult with REAL responsibilities.. is being in a band something he can really manage?  Is that something from his youth he needs to consider isn't realistic.. and maybe he needs to find another way to enjoy his music without actually performing with others like that?

And.. does he need to learn better time management.. note I said HE..you can't step in and fix this  by giving him a schedule.. he needs to figure this out.. and there are tons of ways he can do that.. counseling..self help books etc.. and he needs to want to do it. and be able to truly prioritize what has to be accomplished.

Maybe it is also now that the initial rush of newness.. you aren't really as compatible as you thougth?  Maybe he was pushing down more of his true self and he is tired of the charade?  maybe you have dropped some of your veil too.. and maybe what he sees is not as attractive as things were... 

I'm not saying that you are not pretty.. or nice.. but that you may not be what he needs or wants.. and isn't that what being in relationships is all about?  figuring out if this person is truly your match?

This is why it's important for people to not take life changing steps too quickly.. there are people on here who get pregnant and have kids within the first year.. how  could they have really known the person in that brief point of time?

So.. what I might do is tell him that you are fine with backing off a bit and giving him space to figure out what he wants... If both of you want to continue date each other.. make sure you have ground rules to whether that means you might also date others.. or not. 

If you just purely want to take a break.. I would make sure he knows that you may well date others.. he can't expect you to shrink wrap yourself while he figures himself out.

Maybe I'm jaded, but I see this far differently. Whirlwind romance, talking about moving in together 6 months after you met, your first fight (about money), a pull back, then tears and love bombing when you place boundaries... all of this screams classic narc to me. 

If you continue to pursue this relationship, please tread very slowly and carefully. Otherwise, I see you here on the daily 6 months from now, complaining about how you moved in together & now he got fired from his job & is going to persue his band full time while you pay his bills & watch his kids. 

Too soon for him to get into a new relationship, and way too soon to buy a house and live together.  I think back off and move on.  At 4 and 7 his kids are his primary responsibility.  Don't let him make them your responsibility because you desire to help (fix?) him.

" I worked to be understanding and even helped him draw up a schedule with the hope of managing things better and said we should reduce our time together, but I wanted to speak daily."

Um, no. You stepped in to "rescue" him to the point of sacrificing what YOU want and need and offered to spend less time together. That doesn't sit well with me. Too often, potential SMs work to over prove that they are a cool GF and cool SM to be and sacrifice way too much. Slow way down and really ask yourself if seeing someone less often and being farther down on a man's list is OK with you. It's all very well and good to acknowledge that a man with kids has a huge responsibility but a man with kids wanting a relationship needs to have "done the work," including the emotional stuff, to be able to dad and partner at the same time. If a man with kids has not done the work, then he can't be emotionally available to you, all-in with you, or however you want to put it. This board is full of frustrated SMs who are in agony over not having their needs met as a partner and being gaslighted and told how selfish they are when they start to say something about not being happy. An SM does not have to sacrifice all of her needs and rescue a grown man in order to be a good partner/wife/SM/etc.  

Maybe I'm off-the-charts bitter, but I'm not buying your SO's sob story completely. I'd be really careful and question whether he manipulated you and went into sob-story mode to get you to do exactly what he wants: offer to sacrifice a need (spending less time together). If it were me (mind you, I've been through a ton in step-life and am bitter beyond words), I would toss this guy back. He's too damaged and hasn't done the work. Instead of rescuing him and wondering what HE needs, stop, take a breather and ask yourself what YOU want in a relationship. It's been only 6 months. You don't owe this guy anything. Toss him back. Maybe remain platonic friends and if you're both still single after he's done the work, especially the emotional labour, you can revisit dating if you're still interested.  

I agree with all the above comments.

I would continue to date just not him. 

Seems you want more but he has reconsidered. Everyone has the right to change their mind, at least he was being honest ( or hope that is the case)

Who knows maybe ex and/or the skids started getting harder on him? Sometimes amicable exes become "jealous" when they see the other move on.

Blessings

Protect yourself

I don't think there is a perfect answer here or a simple solution. All the compatibility in the world won't salvage a relationship if there are other things in the way.

You've identified some of the issues: he's overwhelmed, he might be immature, he has an excuse for not seeing a therapist. One other thing -- he and his exwife handled things by distancing themselves. That's what he's doing now too, so is that HIS way of coping? Something learned that he needs to unlearn?

What do YOU need to be happy? That's your starting point. If you think you can find happiness with this guy, what needs to change to address the issues at hand? One thing for sure I'd insist on is starting therapy. Three sessions under his health insurance is better than none, and sometimes there is a way to extend the number of sessions based on varying diagnoses. And if he's making decent money, why isn't he willing to pay out of pocket for something so important? Maybe this is a convenient excuse because engaging in therapy means committing to hard work.

He might tell you he's willing to do the work, but words are cheap. You will (or won't) see evidence over time. If he won't make changes now, early in your relationship, he surely won't do it later: "when the kids are older" or "when work settles down" or "when the new band is on its feet" or "insert excuse here."

Just to echo what a lot of others are saying - take a step back and put yourself first.  No reason you can't remain friends for the time being but no reason to put your own life on hold either (and I would make that clear to him).  His children are still young so all these pressures aren't going anywhere anytime soon.  Bear that in mind and think about what YOU need etc.

Good luck