I'm wondering if she even knows that OP is interested in her romantically or if she thinks she's making a new guy friend while trying to date the guy she actually keeps hooking up with. Did OP specify whether he's made it clear that he wants to date her to her?

I might have just forgotten that part, but it seems like all I remember reading was him asking a girl to hang out and then not really reacting when his friend keeps banging her right in front of him. And I believe he had only told his friend about his interest in her (and even kept downplaying that to him by saying he'd back off if his friend was serious, an interest level requirement that his friend wouldn't possibly know yet in any case).

I just think her behavior makes it fairly clear that she's seeing him as a buddy who won't care if she hooks up and not a romantic interest, but OP seems in denial about that. It's more likely that he's creating this entire thing in his head than that his buddy is stealing his future girlfriend while she's consciously leading two guys on at once. That's a bit dramatic, and most people just roll with what feels good at the time and assume friendly people only want to be their friend.

I mean, OP may mean something else by it, but he is pretty much telling his friend that he thinks this girl is fair game for both of them unless one of them gets serious, and he's not actually telling his friend or the girl that he's serious.

I put myself in his friends shoes and the whole thing about "I'm into her but I'll back of if you're super serious about her" sounds wishy washy and more like "let's both try to get laid by her, unless you're super into her in which case I don't care enough to screw with her." My guess is that OP has a directness problem, is being more friend than romantic interest towards this girl, and has misjudged his own friend's willingness to share a booty call option.

His friend probably just figured it's all good so either of them can make a move anytime, and OP is probably overly judgmental about his friend's moves toward the girl while ignoring the girl's obvious sexual interest in the friend over him.