One way to handle it is to seek advice from someone else you trust, like another mutual friend who is more level - headed. They might be able to give you some good suggestions on how to approach the situation with your friend or what to do about the husband's behavior.
You should try to distance yourself from the situation as much as possible at first. Don't react impulsively. Maybe document what you saw in case it becomes necessary later, but don't spread the information around.
If your sister's friend is being inappropriate with you, it's important to set boundaries right away. You can start by distancing yourself from the friend. If the situation doesn't improve, you may need to have a serious conversation with your sister. She might be able to influence her friend's behavior. If the inappropriate behavior is really serious, like harassment, you might need to consider involving other family members or even the authorities depending on the nature of the behavior.
The husband should have an open and honest conversation with his wife. He should clearly state his discomfort and the inappropriateness of her behavior. For example, he can say, 'Your behavior with my friends makes me uncomfortable and it's not right.'
First, recognize that it's wrong. Then, try to limit your contact with that person. Avoid being alone with him. Focus on your relationship with your husband, remind yourself of the good times and the commitment you made.
Be polite and friendly but keep it platonic. Simple greetings and normal conversation are fine, but don't cross any lines.
Act in a way that shows you respect the relationship between your friend and his girlfriend. Don't try to compete with your friend for her attention. Instead, support their relationship and be a positive influence in their lives.
First of all, it's an extremely awkward situation. If it was an accidental encounter, it's important to communicate your discomfort. You could talk to your mom privately about it, without accusing her friend. Just say that you felt violated in a way and ask her to ensure it doesn't happen again. Maybe it was a misunderstanding, but your feelings are valid.
Trust is crucial. The husband should first trust his wife's loyalty and judgment. If he constantly doubts, it will strain the relationship. He can also get to know the old male friend better. Maybe invite him over for dinner or join them in some group activities. By doing this, he can see that there is nothing to worry about and the friendship is innocent.
You could laugh it off. I know it's easier said than done, but if you can find some humor in the situation, it might make you feel less embarrassed. Maybe say something like 'Well, that was an unexpected sight for you!' in a light - hearted way to break the ice and show that you're not too bothered (even if you are a bit).
Acknowledge the embarrassment. Just say 'I'm really embarrassed that this happened' and then keep your distance for a while to let the initial shock wear off. This gives everyone time to process.
She could be indifferent. Maybe she doesn't really care about watches, so even when they are mentioned in a story about the husband, she just listens without much reaction. For example, if she is more interested in art or books, watches may not catch her attention.