I am so sorry to hear that your Dad is behaving like this.
It is a dreadful shock to receive a diagnosis like this, but he needs to take responsibility for his illness and accept that others are finding it stressful too.
If I were your Mum I would tell him that I couldn't go on supporting him without adequate sleep and move into a spare bedroom.
He would be able to catch up by snoozing in the day and hopefully your Mum would be better able to cope.
Also, she needs to say that she cannot pull him out of the chair as it will damage her back.
A bit of tough love and he may try harder to help himself.
Basically, he behaves like this because he can.
As long as you make it clear you will help him explore how to cope.....and that you both love him...he will ,hopefully, and eventually , accept he must take some responsibility for his own welfare and his wife's well-being.