If I were you, I'd do it.

I am not an expert on this. I think the worst case is, they actually get through the adoption process and the child is legally yours. You might need to provide financial support for him till he is 18, if your brother can not take care of him. (To be honest with you, just having your passport photocopy and a claim, I don't the adoption process won't go through. It is mainly used to fool the bureaucrats.) If in any circumstances, your brother cannot take care of his children, you probably will help anyway.

I feel really sorry for the child. If he is my nephew, I would do my best to help; including officially adopt him.