Scenario: You're a shy loser in their early twenties who hasn't really dated a lot over the past few years. You discover some chemistry with a friend of mutual friends. He is kind, and attractive, and there's a bit of flirtation going on that makes you smile, although nothing serious happens. He doesn't mention that he's seeing anyone else, and it all sort of feels very early stages - kind of vague arrangements to meet up, but no commitment.
Then a mutual friend, unprompted, because you've been a bit quiet about things, mentions that he was catching up with someone who turns out to be seeing this guy. It is the same guy you've been quietly developing feelings for over the past few weeks. You don't have any details at all on this apparent relationship, whether or not it is official, what extent it is at. You've never heard the guy use this person's name, but you also know the person concerned wouldn't know about you. You don't want to hurt anyone and would not have considered pursuing someone who thought of themselves as taken.
At what point are you ethically bound to back off, ie, stop flirting, stop talking to and wanting to spend time with, the guy?
At what point is the correct balance between risking getting hurt and giving things a chance?