I know he’s your best friend but objectively, is there something “wrong” with him? As in has he never been that good with the ladies, unattractive or not well off enough financially that he can’t do “cool stuff” w/o her dime?
Because unless her P is out of this world, I can’t see how he stays in that situation with her with the info you provided when he wants kids and she doesn’t. Option A would be the humanitarian thing to do but aside from the difficulties you listed, I get the idea that your boy wants a child of his own contributing creation. Option C would have him resenting her down the line if he wants kids. And Option D I wouldn’t suggest either because of her advanced child bearing age. It is a medical fact that the higher in age a woman is when trying to conceive and carry, the higher the risk of the child being born with a life long ailment.
Option B, man.