Unfortunately this is happening.
The biological parent have the right to adopt their child if it has been taken into custody.

I just wonder why his rights were even relinquished in the first place which would make him have to adopt the child (if in fact it is biologically his).

Sometimes what we view would be the best home situation for the children which would in fact be to remain together as a sibliing unit.
Does not always dictate what will happen such as in your case.

Have you had the opportunity to talk to the bio father? Will he be willing to allow you continued sibling visits if he is in fact approved and able to adopt the child?

I know as a foster mom your heart tells you to fight him and asks how can this happen. But we have to think in terms if this was your child and you knew nothing about it and it ended up in custody and up for adoption. How would we feel then?

No doubt it happens and more often than we think. Keep your chin up and be an advocate for open communication if the child infact does go back to the bio dad.

Thanks for the comment.. What eventually happened was that the Dad did not qualify to get his kid. - He probably could have gotten the kid before they went into 'the system', but once in the system, then Dad had to qualify with background checks etc and didn't. All these kids are back with their Mom, but maybe not to stay. Its sad.