Bisexual was a common term when I was young. It seems to have disappeared from our vocabulary around the time the PC crowd stated that homosexuals are born that way. I have known bisexuals that were definitely interested in women. Some of the Hollywood crowd swing both ways.
Many abusers fall in love with their abusers. Note the recent murder of the father of two young boys where both the boys and the pedophile were indicted for the murder.
I don't see anything unusual about Malvo expressing an interest in the girl. He was probably heterosexual in his natural desires.
I do think this young man was probably being molested by the older man, he thought of as a father. Their relationship sounded like it was probably based on a powerful influence by the older man and what better way to control a child than sex. This young man is seventeen now. It sounds like this unhealthy relationship started at least a few years ago.
Don't get me wrong. Malvo is guilty of these crimes too. I just think that he was more than likely a victim of abuse and brainwashing by the older man. That doesn't excuse the crimes. However, if the state had done something about Mohammed at the time the mother tried to get the state to intervene, perhaps there would have been a different outcome for Malvo.