I generally think of romantic plotlines as somewhere between boring, annoying, and nonsensical, so my opinion isn't very helpful on the topic. Especially when they interfere with more interesting plotlines. For what I do have...
I really do not feel this is the time to be having yet another major step on LQs issues. That's the kind of thing you should take much more slowly, rather than going full steps every time an option for it is presented.
On the other hand, flinching back and suppressing it is different from just putting it off and calming down.
And then there's the added factor of XS's new spirit, and whether it's Kongyou or not... I have no idea.
I don't think leading him on is a concern. If he was being overt, or she was deliberately encouraging or taking advantage of it, that might be an issue. Moreover, going to deal with something like that right after finding out, especially while having issues about it, is very iffy. She should be taking time to think about it and how to respond. It is just not urgent. Particularly as he hasn't mentioned it himself.
But there's a difference between "don't act on it immediately" and "try to forget it ever happened", so I don't like the other option either...
I do not like this vote.