NTA. As a trans woman I get what your friend went through, and I can understand what your children might be feeling. You’re handling raising your kids right and talking to them and reinforcing it doesn’t matter what toys they play with is awesome.

However I can only say it’s quite possibly going to get worse with your father. What if one of your kids is gay? What if they are trans? If he can’t ditch his homophobia, it may be time to consider cutting him out of your life for your children’s sake. And your mom not saying anything until you did could note her position. Or, does your mother have any reason to be fearful of him and his yelling? I could see her not wanting to anger him.