Question on the ending (spoiler)

Saw this for the first time last night on TCM. Generally enjoyable with lots of clever wise-cracks. However, the ending was questionable. It seems Lee was willing to forgo his love because Lillian was wearing Grant's "conquest ring". Does this imply that she consummated an affair with Grant and Lee would not touch "spoiled goods"? It doesn't make sense that Lee would simply give up his quest for any other reason.