Is this weird? Niece/Uncle what would you do?

Well, my husbands sister and brother in law died in a tragic car accident about four years ago. They left there one and only daughter, considering my husbands parents were older . . . . my husband took it upon himself to get an apartment big enough and raise his niece himself. I've never known my husband without his niece. She's five now and we have kids of our own. Anyways, we have explained to her many times how her parents have gone to live in heaven and they will always be in her heart, but how we will be the ones to raise her as Aunt and Uncle. After our own children were born, she's been watching our three year old say "daddy" and "mommy" and she was always use to calling us "Uncle Robbie and Aunt Kate" after hearing our daughter call my husband daddy many times she's let it slip a few times, even her first word was directed to my husband and she called him "da da" he corrected her and said "Uncle Robbie".. she's always looked at my husband as her father, she knows no life without him, and he was there when she had no one else. She's still young and she accidently will call my husband "daddy" every now and then, then she'll correct herself. I feel like my husband should just let her call him daddy, even if it is a little weird. I guess my husband just feels like it isn't his place. In this situation how would you handle it?