The entire dialogue makes even less sense if you decline Halsin beforehand. I don't play with him in the party because I can't stand his character but tested it out. He still jokes about joining in on the next 'swimming session' toward Shadowheart even if you declined him. And wants to join in on the orgy regardless of you declining him beforehand. And Shadowheart is the one that initiates it if you had the beach scene before talking to the twins.

Couldn't think of a more blatant self insert by the writer. Which is a shame, because he wrote Shadowheart quite well. Even if there's a severe lack of commitment to the relationship as shown by the mediocre epilogue despite multiple heart to heart moments. Now we know why.