I’m disgusted with my friend and need help.

English is my second language so please be patient with me, Thanks!
I’m not even sure if I’m allowed to post this.

I M/20 am friends with a guy 2 months younger than me, so the same age roughly.
We’ve known each other since we were little kids and got along fairly well later in school around 9th grade, we’re closer than ever before now, I’m working a job full time and he’s in college.

Recently a person we know, who lives nearby in the same village we both are from died from suicide and we have a kind of tradition of sorts.
We go to the deceased house and stay preferably overnight playing with cards, drinking, playing carrom or just engaging in conversations for certain amount of days which can vary depending on the nature of the death and other various factors.
This is done to not make the house of the deceased feel empty and silent and have some life in it I guess.

I took my friend with me there, to the deceased house.
We are there, there’s people we know around us, some relatives and a few of our friends too.

The deceased guy had a daughter, and she seemed to have developed a Lil crush on my friend and was trying to talk to him and my friend was just chatting with her too I was like ohh ok that’s normal I guess.
It was too obvious she was interested in him.

We don’t think much of it and I didn’t make a big deal out of it but the next day we went, my friend was shooting glances at her, both me and my other friend noticed and we talked to each other about it too and laughed it off thinking he was just playing around we told our friend too, the one talking to the daughter.

But the next day we went he was actively calling her out to sit besides him and they were exchanging glances at constantly, something finally snapped inside of me and the next day during daytime I asked him not to act that way, that that’s her house, her dad died recently and there are people we know and relatives too around us, it would be awkward for them to act all flirty shooting glances at each other.
He just shook it off and said he’s not doing anything, she keeps talking to him and that’s true I guess.

Now you must be wondering, what’s wrong with them flirting?
Is this guy jealous of his friend getting attention from a chick?
Na, the problem I’ve got with this whole sick sequence of events is that my friend and I will be 21 in a few months, fully grown men you could say and the deceased daughter is around 14 years old, a literal child, how disgusting is that?

I’ve warned him a few times already but he just doesn’t care and tries to gaslight me saying he’s not doing anything but his actions say otherwise, seems to me if they’re left alone he would definitely make a move on her and she wouldn’t mind it too.

What should I do? He’s a dear friend of mine but his actions over these few days have forced me to rethink of our relationship.