whoa.......he broke the rules. I think saying he cheated may be a tad too strong. There was an understanding that some sort of play was going to happen....the play just went further than it should have. This was a situation that probably should have just been avoided. 90% of avoiding sin is avoiding temptation
Rules take a little getting used to. My wife "broke" our rules a couple of times before we got it all ironed out. Part of my wife's problem was that she very seriously got caught up in the moment, and let libido override judgment. She wasn't trying to hurt me, or avoid the rules- she just allowed her id to take over. She's in better control now
I don't see this as case closed "cheating”. I see it as poor judgment and rule breaking. He did tell you about it after all.
Unprotected sex is just stupid. Guess what- people have a remarkable capacity for stupidity, especially in the heat of the moment. Smack him around (not literally) and tell him not to do that again- ever.
I think that you need to reaffirm your rules, and continue talking about what they mean.
Someone on this board said that swinging was an "art form that takes practice." I'm finding this to be true. Our first experiences were not so good. But as we have worked out our emotions, and our rules, it has gotten progressively better. You may want to take a break from this whole thing till you feel secure, and perhaps less betrayed.
How does your BF feel about this? Is he sorry? Contrition has to have some value.
As far as the other couple goes....well are they causing you more pleasure or more pain? Figure it out and make your decision.
Good luck, hang in there, and talk it through. Don't throw your BF away because of a moment of poor judgment.