They are.
The x is allowed to transport her to/from daycare/me - and I've allowed her leeway in the past during the day for trips to the store, etc - but the visitation is supposed to be supervised by her mother or step-father. What 'supervised' means is very vague - it isn't defined in the decree other than to say that 'all overnight visits are to be at a place where a designated supervisor is present'.
My understanding is that my daughter got to know this guy before we were divorced and there wasn't a supervision requirement in place. He also comes around my daughter around my x's mother - but I doubt she knows that he's a convicted drug dealer.