It all seems fine until "feelings" enter the situation. Surprisingly, this is far from limited to the hot wife/gf. That's just the one that gets lots of coverage. No one talks much about the "feelings" a husband/bf gets when his wife/gf admits to having an emotional connection to their bull/bf/fwb.
It doesn't seem to matter if your wife has the freedom to do as she pleases without care or concern, or if you have mutually established rules/boundaries. Once "feelings" enter in, there is a new layer of uncertainty that a husband/bf gets. He now has HIS own "feelings" and they are usually not comforting. He now has whole new ground to consider and ruminate on. Will she leave me? Does she love him more than me? Are they doing more than sex, like going to movies together or going to parties together or hitting the bars together? Will I have to accept that she would rather do those things with him instead of me? Will she be staying with him for longer periods of time? How much time will I have to be alone? All those thoughts and more will invade the thoughts of a husband/bf in this situation. "Feelings" will arise from the tempest of thoughts.
Some husbands/bfs get off on and thrive on the angst and mental torment. Other husbands/bfs are crushed and can't take it.
I'll fall back to my steady notion that it takes a really smart and sensitive wife/gf to be aware of the affect she has on her husband. She should know the things that turn her husband/bf on AND the things that ruin his desire. What good is being a hot wife if you're no longer married? What good is having a hot wife if you're always expecting less and less attention from your wife sexually and socially?
In the OP's case, he's been there and done that. ANY TIME you do ANYTHING sexual or not, if you like it but had mixed results you want to analyze the situation and figure out what would have made it a better experience. This concept has universal application. It works on bowling or sex, you name it. Since the OP's wife is initiating the return it would be good to discuss what would be different this time to avoid the previous results.