I'm so sorry this happened. I agree with you - he's choosing this woman over his family and over YOU.
If he were my husband, he would either stop this friendship or he'd have to get out. I'm not sure I would have forgiven him in the first place, but that's just me.
Personally, I think once a cheater, always a cheater. If they're going to continue this "friendship", I have a feeling they're going to find a way to continue the "relationship" if you know what I mean.
Again, I'd tell him either to give her up completely or he could just get out. You can't be working on a marriage and still have that woman between you. Perhaps marriage counseling would help. I wish you the very best. God bless and please take care. I really feel for you, my friend.

Hugs, Lee