I was in the position of being friends with the married one having the affair.
We were work friends, close but not in each others pockets IYSWIM. Didn't really know her husband.
I tried to be understanding at first, wondered if it was an exit affair, if there were issues she hadn't told us. . .
No, she just wanted to be married and sleep with other men, she see's herself as happily married, despite having a 'boyfriend' of over a year.
I had to walk away, I did tell her why, she just shrugged, so not as good a friend as I thought, last I heard she and hubby are talking about kids, and she has a new boyfriend.
I think by not telling her how you feel and not walking away you're are saying that this is ok behaviour, (and a kind and lovely person doesn't do this to another human being).
I don't care if she did/didn't know about the wife at the start or what crap he's told her. Once she did know she should have walked away, and I said the same of my experience above.
Having couples night with them is just cruel IMO and your friend is deluded.
If and that is a big if he ever leaves think of the wake of destruction they will leave behind them, is that the behaviour of a kind person?
And I bet £50 that the only way he will leave is if his wife finds out and kicks him out.