I (28M) rejected the woman (22F) I love because she has a FWB

I'll try and keep this as short and to the point as I can.

We met at work last year, we became friends pretty much instantly, starting hanging out at lunch which moved on to us hanging out outside of the workplace. The first time I saw her I was struck by how beautiful she is, and as time has gone on her beauty has become the least interesting thing about her as she is smart, funny, caring, sweet, intriguing, charismatic, honest, genuine etc. I could keep going on about how amazing she is.

A few months into our friendship I attempted to move it on to something more intimate. I asked her for dinner and drinks. She was grateful for me being honest about my feelings but explained that she was not looking to date anyone. I was fine with that, life goes on.

I didn't lose my feelings for her but I did pull back. Admittedly I did ask her out again a few weeks ago but she said she was busy on the weekend I asked. Again, fine, life goes on.

Recently, she started showing interest, flirting, complimenting, teasing more than usual etc. Today she told me she had been rethinking things and would like to accept my offer of going on a date if it still wasn't too late. I was over the moon and said yes, but then she said she had to tell me something: she started a fwb relationship with someone about a month ago. She met a guy whilst out with her friends, she went back to his for the night which turned into a whole weekend, they took each other's numbers and started seeing each other. She explained that she doesn't have feelings for this man, just that he was someone she was having fun with.

After she told me about her situation, I said I need to think about things. I'm a traditionalist, when I like someone I just want that person and no one else. I don't have any interest in seeing anyone else, I spend my time thinking about that person, it's just who I am and how I've always been. My way of thinking perhaps goes against every piece of advice every dating expert on the planet will give, but it's my life and I online it my way. I don't have anything against people having casual sex or a fwb, but for me I just don't like the idea of putting in my time, effort and money just for someone else to reap the rewards with something as simple as a 'you dtf?' text.

After a bit of thinking, I phoned her and told her I'm not interested in moving our relationship forward. It killed me to hear about her fwb, it killed me more to reject her. Maybe in time they'll stop seeing each other and me and my friend will move on with each other, but for now I just don't think I'm ready to accept her situation and I don't want to present her with an ultimatum.

Has anyone else been in a situation like this? How did it feel? Do you regret your decision? Did I do the right thing? Should I have given her an ultimatum? The only thing I was certain of was sticking to my beliefs, even if some might call them immature.