I'd say the same thing as Bill.

Apparently, she has no fear of losing you. And you do fear losing her. That creates an imbalance.

I'd say that her admitting she had a fantasy is a good thing. If she planned to act on it, she wouldn't have told you. But that's just an assumption. Nothing prevents her from acting differently then what I find logical.

Her male friend rejecting her because his GF cheated on her, that's not how it works.

Dropping in on them is a terrible idea. You lose either way.
Demanding she stops meeting him is also weak. As a man, you aren't supposed to be jealous.

You can warn her that you think your relationship is in a rut and that you think it has to be rekindled for it to last and that you will work hard on achieving that, and that you expect the same from her.

Or maybe her so jealous, she offers stop seeing him in return. It's childish, but that may be how it works.