It's illegal. Also, sex tends to be more enjoyable when you can enjoy it regularly with the same partner ( hence marriage ).
Therefore, yes, it is unhealthy. Move along.
Frankly it sounds like a good way to damage (or even destroy) a friendship.
I don't know, it sounds like a kink for her and it seems like he was into it too (or at least likes helping her). Of course it does seem like a slippery slope thing, I'm usually skeptical that sex and friendship or money and friendship can mix except for really healthy people and I'm even more skeptical once you combine the two