Hmm. Perhaps the affair is something she has such shame about that she wants to forget the whole thing, just continuing the friendship. Maybe she feels that she has worked hard to make up for it and this kind of proposal has brought it to the surface again. It could be that she thinks putting herself in that position will give her a reason to feel like she is a bad person or doing wrong again. Maybe the next step is for your hubs to talk to her.
The world opens up... when you do.
Oh, oh, can't you see? Love is the drug for me. ~Bryan Ferry
"Love is that condition in which another person's happiness is essential to your own." ~Robert Heinlein