All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and messenger.
If this woman got married before she observed her waiting period from her first husband, and before her divorce became irrevocable, then her marriage is invalid without any doubt. For more information, please refer to Fataawa 89745 and 120395.
Therefore, that man did the right thing by separating from that woman and cutting all relations with her. Also, he is not permitted to marry her daughter as he married her mother believing that his marriage to her was lawful. Having sexual intercourse with her was based on Shubhah, i.e. mistaken assumption that it was a lawful marriage. In this case, the daughter of his wife becomes forbidden to him just as she is in a valid marriage.
Ibn Qudaamah said: “A Shubhah sexual intercourse is a sexual intercourse in a void marriage, or a void purchase of a female slave [with whom one had sexual intercourse believing that she is owned by him], or having sexual intercourse with a woman whom he mistakenly believed to be his wife or to be his female slave, or having sexual intercourse with a female slave who is co-owned, and the like; all these cases render the person forbidden to marry all such women as in the case of a valid sexual intercourse, according to the consensus of the scholars.” [Al-Mughni 7/118]
For more information, please refer to Fataawa 83883 and 134801.
Allaah Knows best.