Cossette is a college kid. She's young. And apparently she has not had the best dating history, as indicated by certain statements she has made. Jealousy and insecurity are not surprising reactions. I'm a flirter. I flirt without even realizing it most of the time. This has upset some of the girls I have dated. While I am pretty open about these things, I understand why some people are not. While her actions are not justified, her emotional reaction is both justified and understandable.
Also, I do not think Martin is being a bad friend just because he refuses to lie to cover up Steve's behavior. If anything, I think Steve is being a bad friend for putting Martin in that position.