But why would he bring her name up and even suggest that? he knows I hate her... Why would he bring up her name? He says he was kidding... What does this say? Is he trying to get back to normality by being able to talk about people (such as her) he works with? did he just want to see my reaction? is this sign that he feels he can bring her name up because there is nothing going on anymore?
Don't try to interpret "signs". It's a guessing game and it will drive you crazy and chances are good you'll never interpret them accurately. And even if you do, the very next moment things can change and you have to begin all over again. It also can throw you off course and undermine your DB efforts and keep your mind focused on the wrong spots. So unless this is an exercise you want to engage in 24/7 in order to make yourself bonkers, deal instead with real outcomes and results.
BTW, when a guy says he was "only kidding" after receiving a negative reaction, then IMO chances are either he really was only kidding, or wasn't and is now backpedaling. Again, you can see how trying to guess which one it is can make you nuts. Instead, if and when the OW shows up one day to make the foursome, then you have something real you don't have to guess about.