you need to clearly tell him you're not interested in being with anyone else, you don't like the idea of it, talking about it even if it's "just words" or ideas or a fantasy are disgusting to you. The end.

If he can't drop it you have a huge problem. I think you are already at the point where this is a huge problem but it's hard to tell if he might actually think you're into this based on how you describe your initial silence about it and then testing to see how far he'd go... he might stupidly really think you are ok with it. But there's no way this would turn out well, not with his friend, not even if you WERE into this fetish. And since you aren't, it's awful for him to pressure you about it.