I honestly believe that once all this mess is sorted out, the 16 year old will not lose custody...she may end of living in foster care with her kids, but she’ll not have parental rights severed (Unless she wishes).
And more than once, I’ve seen teen girls, pregnant via abuse, molestation etc give up their kids so the children can have a better chance and they themselves can put an ugly past behind them.
Here's a nightmare scenario for you...girl gives up parental rights...FATHER (SIRE) invokes his.