Well here are the issue with your righteousness.
Your issues with me, anything at all about me, is off topic. The issue is what is best for the OP and his friend and this SP.
First of all we don't know if he knows or not.
Doesn't matter. See my post to red for why it doesn't.
Secondly the relationship seems to be relatively young and maybe just maybe
she does truly like him but is wondering whether this guy is ready for the truth so she's pacing herself.
This will help her make up her mind.
As well as to not let it affect her lively hood.
If her livelihood is incompatible with a relationship with the OP's friend that is something they should discuss as a couple and decide how to handle.
After all he himself
might just be enjoying the sex for the time being, maybe she wants to know if its more than that.
Another thing they can discuss as a couple. "I really like you but while you are doing this job let's keep it pretty casual and non committal" is a totally valid adult conversation they might have. Or they might have a different conversion, it is up to them to discuss and work out.
Along comes Mr. righteous (fugi) yes the be all know it all and spills the beans to his friend.
Maybe try reading my posts before writing about what you think I would do. My posts are just above, not hard to find, you don't have to make stupid statements like this, just a little advanced reading and you would know I would talk to HER, not him