This could have been resolved as soon as he asked Chae on if he had a girlfriend.
Like this:
“Where did that question even come from? You have a bad dream or something?”
“No. I saw you outside your apartment with (forgot her name). What is she to you?”
“Oh, that! She just wanted to take some pics with me to get her toxic ex off her back. The one I like is you.”
Boom. Resolved. (● ̄(エ) ̄●)
That hug was everything