Does it matter? He's a friend. A flirty friend. You're in love with your boyfriend. So there's no problem here. The only potential problem is if you're attracted to this guy, and have poor impulse control.
Let's talk for a second about flirting. Flirting is harmless. It's playful human interaction that's intended to spur superficial attraction. Flirting never hurt nobody. Making out with someone who was flirting with you when you have a boyfriend... now that's hurt plenty of people.
I have plenty of female friends who I love. As friends. Sometimes when we throw the "L" word around like it's not worth anything, it's usually because it's not worth anything. I'm sure your joke was hi-larious. But his off-the-cuff "I love you" was probably not a sincere declaration.
But then again, maybe he does carry a torch for you. Maybe he's nuts about you. I know in the past, I've been so in love with a woman, I really couldn't care less if she was dating anyone. That was my problem of course. My moral conundrum. My love has burned so intensely that I didn't care what the inferno consumed.
If this is the case, then I would abandon any delicate diplomacy. I wouldn't try to "move" him into the "friend territory." He's already in the friend territory. He's trying to bust out of the friend territory. I'm speaking, of course, if he was actually trying to pursue you. I'm gambling that he isn't. But if he is, then, yeah, he wants out of the so-called friend zone.
What do you do if he's nuts about you and wants you, boyfriend be damned? If he's "game on," then you have to be "game off." I'd cut contact for a spell. Don't hang out with him. Avoid being alone with him. Ignore texts. If he continued to try and get with you, then I'd abandon politeness. I'm not saying unleash the bitch. But spell it out for him loudly and clearly. Don't give him any room to misinterpret you.
But, honestly, I'm sure he just loves your sense of humor. Besides, there's always a little sexual oomf between male and female friends. This doesn't have to mean anything. Unless, you know, you suck face with a smooth talker while lovey dovey is home heating up some Ramen noodles.