This show is driving me insane, I just wanna know already!!! I've been reading/thinking/looking at screencaps for hours and days and weeks on end. IMO...Ed is let go at f3, Reid is f2, she turns him down and is preparing to meet Kip at frc to profess her love when Reid comes back (he is devastated, feels like he let her down, fears got in the way of him telling her how he really feels), lays it all on the line and proposes. Jillian is really taken aback by this (Reid saying, "I can tell she's confused") and needs some time to think things through...she is at frc with Kip, freaks out and wonders if she is making wrong decision, asks Kip for more time, hence when she is hugging him, has that tormented/anguished look. I do not believe she will change her mind, Kip will still be f1, but I think Jillian gives it a twist at the end in the way she lets Kip know he is f1.
I guess the big reason I believe Reid and Kip are f2 is because of Kip/Jillian on surfboard (wearing same bikini she wore in bathtub with Reid on their 1st date in Hawaii, I think she would use same one for LCD even though she may have worn it on FD and the other I think Reid and Jillian on top of the cliff and yes, I do believe that is BI as well.