What he imagines during masturbation IS incest. Argeed? I think that makes incest a topic of the show worth mentioning.
Intercourse isn't the only "sexual" act.
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I prefer Marriam-Webster because the URL is short. 
Main Entry: sex·u·al
Pronunciation: 'sek-sh(&-)w&l, 'sek-sh&l
Function: adjective
Etymology: Late Latin sexualis, from Latin sexus sex
1 : of, relating to, or associated with sex or the sexes
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Masturbation relates to sex, and desire for sex relates to sex.
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Main Entry: re·la·tion
Pronunciation: ri-'lA-sh&n
Function: noun
Etymology: Middle English relacioun, from Middle French relation, from Latin relation-, relatio, from referre (past participle relatus) to carry back
7 a : the state of being mutually or reciprocally interested (as in social or commercial matters)
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That says to me, that if both parties desire eachother sexually (in the case of Koi Kaze, Koushirou has displayed such desire, though Nanoka hasn't) it is a sexual relationship. Even a nonmutual relationship is a relationship and can be a sexual one.