I understand the feeling of no one understanding, even when they know.  The trans thing is so unlike the gay thing that people just don't get it.  My ex remains in the closet, and has moved in with another woman, to whom he told a minimized and sanitized version of his feelings and behavior.   

I have an adult son, and it was difficult enough to tell him why we were getting divorced.  I wanted to tell him, because, like you, after living with secrecy and dishonesty, I wanted an honest relationship with my son.  My ex did not want to tell him.  Eventually he did tell him, but only because he thought our son already knew, and he wanted to control the narrative.  

I wouldn't worry at all that you are "outing" him.  It's not outing someone else for you to talk about your own life.  What you would be doing is providing an explanation of what went on in your life, which you have a perfect right to do.  It happened to you; it's yours to talk about.  That includes the abuse and the infidelity, as well as the trans nonsense.  

 It makes sense to me that you realize that telling your friends what went on in your marriage, and the cause for your leaving, might make its way back to your kids, so you want them to know something.  You can't, however, make him tell your kids about his adventures in gender identity.   (He may not even know himself how far he will take his feminizing actions.)  So it's up to you to tell them--the question is what to tell them.

 It's not clear to me exactly what you would be able to tell your kids, given that you yourself are not sure of where your ex's behavior is heading. You don't say what if anything you've already told them about why you're no longer together.   Have you accounted for the infidelity?   You could certainly tell them "Daddy wanted to date, and married people aren't supposed to do that."  (or something similar)  Perhaps there's something similarly simple you could tell them about his physical transformations, tailored to their respective ages?  It might not be necessary to say anything about the gender stuff to your youngest, but to the older one whose friends have said he "looks like a girl," did you follow up with "What makes you say that?  His long hair?"  It would useful to know if your child is registering only physical changes and filtering that through their ideas of what boys and girls normally do (short hair on boys, for example), or whether the feeling goes further than that.  If it does, would it be possible for you to say something like "Sometimes Daddy likes to pretend he's a girl"?  Brainstorming with your therapist for the right phrase would be a good idea.

One final thing: You don't say whether you're actually divorced, but if not, I would definitely confer with your lawyer about the wisdom of telling your children about their father's gender confusions, because you don't want to interfere with settlement negotiations.