Spot fucking on.
Just because they were fucking before and have fucked before doesn't mean they should jump right back into it in the 2nd or even 3rd update as some people have said. They need to get to know each other again and they need to properly reconcile with the fact that they both want each other and can't fight what they're feeling. That's going to take time and a few updates before we get there.
It may be cheating for both of them, but like you said, it's purpose is to create that moral dilemma because it's a choice between being with the person they love or being with someone else in a loveless relationship just because it's the non-taboo relationship, so I think in his instance it's not all that bad what they'll be doing.
Sam is no longer in this game and I doubt he'll show up later.
First of all, she didn't "bang" anyone else in the canon story, only in the non-canon side stories in the RPGM version. Secondly,
Mia eventually developed feelings for the MC but the MC also went after their Mom and they started having sex too. The Dad figured out his wife was cheating but he was actually intrigued to see his wife get fucked by her mystery lover, so they did that in a hotel room with the MC wearing a mask. Later, Mia overhears her Dad talking about it to someone on the phone and he describes what the guy (MC) was wearing when he entered the room, and Mia realises he's describing the MC's clothes because she saw him leave that night.
Mia is then incredibly hurt by this revelation and after being cold to him for a while, she enters his room one evening to have very emotional sex with him and the next morning she has left home because around this time, she was contacted by her Aunt Grace who offered her a job, and at first she was reluctant but now she has taken it. Mia left the MC a very heartfelt letter explaining that she had left and why, but just that she has gone to live and work with their Aunt and not about her feelings. She told him it was best that they both just live their lives and move on, and she also left him a large sum of money to put towards his college education, and this sequel picks up 2 years after that.
Also,
the money Mia made came from porn videos of herself and the MC that were made at the insistence of her friend and neighbour Emma, and posted on the dark web and were marketed as real bro/sis videos. Emma found out about the MC and their Mom and Mia then found out that Emma knew, which led to Mia confronting her about it, slapping her across the face, and saying they were no longer friends and she never wanted to see again.
Actually, it doesn't, because Mia is his sister and she left home because, after catching feelings for him, she found out he was also fucking their Mom and she was hurt by this which is why she had to get away. This dynamic is what will play into the story and it's important to the context as having her be his cousin simply won't land the same way as the story progress and their feelings are explored.