Omg the man was just flirting! He came clean when he probably should have stfu but now of course she has trust issues! Diddy, the walking away doesn't help but I totally understand why you do it... But that is for yourself... She obviously needs to re- hash over this incident as it's nit resolved in her mind and you need to stick it out for her now!! See why you should have kept this one under your hat??
Not sure though if this is the reason she has made this decision though, can you answer some if libraluv's questions?