I need advice on the relationship with my best friend

Hi everyone, I'm 23 and bi. I need help to understand the relationship with my best friend (M, 19y). He's super important to me, I love him a lot. I hope maybe some of you might have had similar experiences or know how to read certain behaviors.

It might be a bit long but I'll try to tell our story from the beginning. If you're not interested you can jump this first part although it provides some extra context.

FROM THE BEGGING
We met back in 2017. He was very young (15) and trying his best to fit with his friends, frequently getting drunk and occasionally smoking even if he didn't like it. He was also quite homophobic, like everyone else in his small town.

We started to grow closer cause I remember seeing something beyond the act he used to put up when we were out with someone else, so he started inviting me to his place where he would drastically change his behavior and be more himself.
He was very "allergic" to physical contact with other males, he was avoiding even little friendly hugs when we knew we wouldn't see each other for weeks since we live in different places. He once got angry at school cause an openly gay boy told him he was cute and wanted to hang out with him. Half of his family is also very Christian.

Fast forward to 2019, we fought because he got a bit violent with one of his friends who called him a f*g. I was upset and he started crying. He told me he reacted like that cause he is not gay and he put a lot of effort into "not looking gay" when deciding what to wear or how to behave.
At that point, I got *very* angry since he already knew I was bi and I felt offended since he made it sound like looking gay is the worst possible thing in this world. And he justified by saying that there are people worse than him.
A few hours later he texted me he was sorry and that he realized what he said was stupid and he would change. And he did.

BUT, a few months later we had another fight over the fact that he was avoiding his friends and me for a girl he met 3 weeks before. He once asked to go out together and disappeared using us only for a lift to meet this girl but without telling us. We talked about this alone, it was early 2020 and he cried again but this time something changed profoundly in him. He hugged me for an hour in silence and then told me he started seeing that girl cause he desperately needed to cuddle with someone. He also said he would have done that with me but was too afraid to ruin our friendship and too embarrassed to ask.


NOW
From that day, almost 2 years ago, things got very physical between us. Right now we spend a lot of time cuddling, kissing on head/cheeks/neck, sleeping with each other (when we can since the pandemic made it harder to see each other for many months). He does this in public only if he's sure we're somewhere he won't be recognized and he avoids cuddling at his place if his parents are at home. He also texts me every day when he wakes up or goes to sleep and during the day.
I never asked him about his sexuality anymore because I don't want him to get scared and honestly, I love what we have right now and don't feel a strong sexual attraction. I feel that we love each other a lot and it's amazing.

But... the other day he had a panic attack while working and he texted me he needed to talk ASAP. We had this very long conversation and he clearly was trying to avoid something, but after 2 hours he told me the night before he was out with some friends, 2 couples and a girl, and the couples went home early and he was left with this girl he already knew since they were kids. They kissed.
I didn't know how to feel, because I realized that our friendship changed into something a bit more, but if he's straight I can't expect him to avoid what he feels in his sexuality. So I didn't say anything and they started to go out together a few times.

I realized I don't want to lose what we have so I talked to him, he said he'll never replace me with her and she'll never be more important than me. A week after this conversation we were sleeping together and he did something that confused me quite a lot. After we woke up he hugged me very tight for a few minutes with my face pressed right below his chest with my breath warming his skin and I remember feeling his (good) smell while hugging him. It was super intense and made me feel something more. When he got up I noticed he was having an erection, so I'm not sure if he intended this to be a bit more than usual cuddles or if he just wanted to do something romantic, but that close contact caused an unwanted erection.

So here are two questions:
Is it possible he's straight but having this very big romantic attraction for me?

And if this is the case, how can he keep both this relationship and a new one with a girl? I think the majority of girls here wouldn't be okay if they knew how close we are so I'm not sure how this could end.