Hmm I don't know if it crosses a li ne of familliarity. I think that that line is more in the mind of the observer then the subject. When masturbating the guy or girl you are fantasizing about is nothing more then an object, a means to an end. It could have been the neighbour or the neighbours daughter or... well you get the point.
In the eye of the observer it is much more significant. She feels less close to the neighbour then to her own sister and even less close then that is some celeberty. That means se feels less hurt by it very understandebly.
I must say here that I do not blame her for feelig hurt, betrayed and disgusted it is the man in this that could have thought about the implications of him masturbating to her. And even then he still could've left the picture and done it by fantasy alone. I think that in this the man is at fault.
So in essence I think that the man in this did nothing abnormal, in choosing an object for his fantasies. Even though he wasn't thinking about the implecations of using the sister as an object in his fantasies. It is worse if he also has true feelings for her. What lies between them is an issue of trust, betrail, disgust and maybe more. It might be that they need help in dealing with this, but that is something they should decide about. I think that they should not just run off to therapy if they feel they can do it on themselves.
And still the age is an non issue in this. isn't the whole fantasy thing invented to get you the best you can possibly get. I mean there are 1000's of sites featuring "barely legal girls" (515000 according to a major search engine) They aren't their just because we have a lot of single teens and tweens. Most men want to see girls in the prime of their lives around twenty years of age. Why else would all pornstars have implants lifts and lot's of make-up on. It is all about the perfect girl, or rather what we as a society see as a perfect girl. You know the cheerleading, sporting, straight A student who is blond skinny tall, has a hourglass figure and has large breasts. The ultimate fantasy of our society. Not to my liking either, deversity is the flavor of the world ofcourse, but it is the way it is.
Now, I realize that if I wrote the first reply I would have written something else, less strong and more empathic. I replied to you, setting a word against yours to balance it a bit. It was not my intention not to take the woman seriously or feel silly for feeling betrayed or disgusted.