Well I guess it defends what you mean by 'she goes all out with the sexual physical contact'.

I think if she was selling sexual favours and he part takes then yes I think it is cheating. Even though it is only physical and not emotional if she is giving bj's or what ever and he goes for it it is cheating.

If he is just watching a strip and watching her doing sexual acts then it's not cheating, although if you feel uncomfortable with that then I believe you have the right to tell him.
What he does with that info is then up to him.

tt