When Is Flirting Inappropriate?

My question today is when is flirting inappropriate? I have two friends, one male, one female and they are both married but they are always flirting with each other. Now don't get me wrong I have done my fair share of flirting but I know when enough is enough. My female friend has told me on several occasions how attracted she is to our mutual male friend. I told her that if she is attracted to him she shouldn't be flirting because that could lead to something else if he is attracted to her. She doesn't seem to think so because she thinks it is just harmless flirting and nothing would come of it.

I have witnessed them flirting on many occasions and it has gone from innocent to very touchy feely. I would hate to see either of them ruin their marriages over this obvious lust they have for each other. I asked my male friend the other day what he thought about the situation and he said that he is attracted to her but they are just flirting and nothing would happen because he loves his wife. At this point I don't know what to do because I am good friends with both families and I think the flirting is inappropriate at this point.