Sims get upset if a friend is fooling around, or their paramour. Now, I have never had one wake up upset, because they weren't witnessing the incident.
I recently had a female vocalist living with 2 men. For 5 sim weeks, using the LTR of "no jealousy", everything was fine. Then out of the blue, one got negative red marks when the other one was flirting with her. So now, Mr. "no jealousy" is upset. I couldn't figure it out.
And, the same guy got upset when she flirted with others (he himself is a flirt and non-committal). I'm wondering if part is due to age. The guy who got upset, was reaching elderly in 8 days, and the other two were YA.