Hi, I don't think you are being over sensitive at all. I think your wife needs to face up to the fact that she is a mother to a 4 year old boy. If her relationship with this man is going to be long term then he should respect the fact that it is your house and that your 4 year old is not capable of understanding all this.
You can object to your wife and you could even get your solicitor (if you have one) to write to her with your concerns but it is yet just another example of people losing responsiblity as to who should be a priority in their life.
What has that little boy done to deserve this, not saying the split is not for the best, don't get me wrong, I am a single mum to 5 young kids and asked their dad to leave. It is their actions after the decision that make my blood boil. My children come first every time.
Sorry I can't offer more concrete advise but you are definetely being over sensitive.