I am sorry your s18 had this thrown at him, and the pain he is going thru.
Yes, that is an interesting dynamic that the WAW feels that b/c of the separation with no relationship with the LBH that they feel they are not doing anything wrong, in your case her saying there is "no affair".
My WAW went thru the same thing. On the dating websites and FB she listed herself as "single", though we were separated and no divorce action pending. This really bugged me, and it wasn't until I accused her of committing "adultery" that she understood that she really wasn't "single". In my case, it came off as a judgmental attack, but I think it also helped my WAW see she was not acting properly.
Is there someone in your W's life that is giving her good counsel and helping her see things more clearly?