I think he does know, but doesn't care. He seems to get off on the attention - both from her and the cameras. I think he's totally insensitive. If Jeff and Georgia, Ruby's closest friends, have trouble trusting him, there's a reason. The fact that he repeatedly says hurtful things to her and she keeps going back for more is just mind boggling. Not only does she need to be in therapy for the childhood issues so she can remember her past and face it, she needs to deal with it so she can work on her self-esteem, so she'll stop going back for more punishment from Denny.
Maya Angelou was right: "The first time someone shows you who they are, believe them." Denny has shown her again and again and she doesn't believe it.