I don't think there's much you can do - if you tell the authorities, the two girls will lie and say that you're jealous of their father's close relationship. And you didn't state if the father had a temper or not - I'm betting he does. It's evident that this situation has been going on for years - how many I can't begin to say but certainly long enough for the two girls to believe that this is "normal" - at least for them. What I would do is document this as fully as possible - dates, times, what was said to you, who said it, WHAT you said in return - keep your emotional reactions to yourself.
Then debate with yourself if you REALLY want to get involved in this situation - remember, you were asked to leave when you found out and reacted to it. If you do choose to take this to the authorities, prepare yourself for an emotional whirlwind. You may even get blamed for trying to molest the girls yourself.
By the way, make sure you have an extra copy of your "log" kept in a safe place.
It isn't possible to determine exactly what's going on, but it is clear that there are some inappropriate behaviors happening. A father should not be sharing a bed with his teenage daughter.
Stay broken up, and block his phone number, and don't look back. This isn't a situation that is going to fix itself, nor can it be explained away. If it is later revealed that something is going on and you knew (or should have known), it could come back to haunt you.
Second, if you have a feeling that sexual (or any other) abuse is occurring in the home, you can anonymously report to child protective services and let them determine whether the evidence is enough for them to start an investigation. I can tell that you care about the girls and are genuinely concerned about the situation, so if you make the call, you'll at least feel confident that you did everything you could do.