It is awkward. I guess he was trying to find out if you liked him, but maybe he feels he received a negative reaction, and that it was not a good idea to ask his parents to approach your parents, because he felt you were not interested? But then when they saw your reaction to the other girl, they realized maybe you did have positive feelings for him.

What I want to say next seems like it does not apply because of cultural differences, but I really think it crosses all cultures. Some years ago I was watching the TV show The Bachelor, and one of the girls was very open about her feelings, and the other was not. The boy chose the girl who was open (although I don't think it was the final episode). I was shocked myself at how open she was, but really she wasn't saying anything wild or weird, just being honest and truthful. Which is not how MY family is, but I have found out that my aunts and uncles and cousins are different from how things were in my house.

So there is more to marriage than looks, believe me! Think more about what kind of person would suit you.