My friend was being extremely flirty towards me, I asked him on a date and he said he as doing it as a "joke". Very hurt, what do I do? [26M, 27F]

I joined a hobby group earlier this year. We meet 1-2 times per week and the group has 50 people but there is a core group of 10 that meets up every time and hangs out outside of the main group as well.
Jack was one of my closer friends in the group (I thought). We would always hang out together at the outings, we also did a lot of the event organizing together and we talked every day.
I had been casually seeing a guy but ended it a few weeks ago. It wasn't that serious and I didn't introduce him to my friends, but I mentioned it to Jack after we split up. After that, our relationship became flirtier and flirtier. Jack was more touchy-feely when we sat beside each other, he complimented me a lot, he started calling me at night to chat. I was Snapchatting my sister once and took a photo of us and sent it to her, she asked if he was my "new boyfriend" and he told me to tell her yes and ask if she thought he was cute...he also made a selfie of us his phone background and used cute nicknames as my contact (so did I). I started having a bit of a crush on him.
Now, a few weeks before this, Jack had mentioned to me that he was thinking of asking out another girl in the group, "Sarah", but decided not to because she was already hooking up with a different guy in the group. Jack and Sarah were always friendly when we went out after that but just seemed like friends and Jack would usually come hang out with me.
Anyway, last weekend we all went out for drinks and Jack was being very touchy-feely, putting his arm around me, he even held my hand for a few minutes and made a bunch of remarks that were basically "we'd be such a cute couple, etc". Other people in the group texted me after and asked if we were a "thing" now.
Sorry for the info dump but I definitely feel like I wasn't misreading his behavior.
I ended up asking him on a date on Wednesday and I was really surprised when he said no, and "he knew I liked him but he only saw me as a friend". I said that was cool and hoped there was no awkwardness, but "was I imagining you flirting with me hard for the last little while?? I was really under the impression that you were into me" and he said "You weren't imagining it, to say I was flirting with you is an understatement but I was doing it in a joking way, that's why it was so over the top". (It wasn't really over the top? Like not in a way that seemed like it would be obviously not real...)
That really hurt my feelings. I kind of feel like he led me on but that's not even why I'm upset, it's that he did it as a joke? That feels so mean. Like it's a joke that he'd ever be interested in me? I don't get it and I feel so embarrassed that I was crushing on him and he was basically making fun of the idea of us dating?
I didn't want to make the hobby group weird so I just let it go and we carried on as normal, chatting and planning activities for the group (no more flirting though!). We had an event on Saturday, and when I arrived, Jack and Sarah were all over each other. They were obviously there together, sitting on each others laps/kissing/touching each other. Jack came to sit next to me when I arrived and started talking, and then Sarah came and sat beside him and he put his legs over her and she started rubbing them and leaning into him...I just feel that was so inconsiderate, and he should have given me a heads up before the event that they were together? There was a 6-day span between him holding my hand at dinner-me telling him my feelings and asking him out-him and Sarah fooling around in front of me.
Then, the next morning, he texts me and tells me I "looked great last night".
Basically I feel like Jack and I were supposed to be friends and the way he handled this was so inconsiderate. Coming onto me SO HARD for a laugh/to get Sarah's attention/whatever in the first place feels really mean. I don't mind that he rejected me, but it also would have been nice to give me a heads up that he and Sarah were together a few days later at an event he knew I'd be at, especially with how they were all over each other. I feel embarrassed and well...like a joke.
I don't want to be friends anymore and I don't want to talk to Jack any more. He's still texting me daily in a friendly way and I just don't want him to. However, I don't want to cause any awkwardness in the friend group. I'm cool with being "buddies" in the group and seeing each other at events and being pleasant but I don't want him to call me or text me or try and spend time with me. I don't think talking to him about how I feel is worthwhile, he obviously DGAF about me even as a friend because I don't think he could have been LESS considerate about this.
How can I handle this with the least amount of awkwardness?
tl;dr Asked out a "good" friend who was flirting with me really hard for weeks, he rejected me in a very hurtful way and then went to a group event with another girl and they were fooling around beside me. Very upset, how do I deal with him and not make the rest of the group awkward?


Source.

Cause a big scene by raising your making sure everyone can hear you, telling him how dare he treat you like that, playing with your affections & for making you look stupid in front of your Co-Workers, then never talk to him again.