Dating your ex?

So I met a few friends out the other night. Some I had not seen in a while and another that I see often. It wasn't uncomfortable but it was odd, that my friend was with her ex. Which is complicated because technically they're not divorced. And the split is fresh within the last year and they're sorting through the details bcause they have a child. Now for all implicit purposes she has moved on, and he is aware of it too. Then why is she dating her ex? Now, he is of the impression that things can be worked out. She doesn't want to lose him as a friend. Part of her doesn't want to let go. But she is ready to move on with her life. At what point does she sever it? Should she? Better still - can you still hold onto a friendship with your ex, if your ex still has a thing for you? Isn't is misleading for both of you? And won't it complicate any relationship in the future - let alone the idea of dating altogether?? Not all relationships end badly, but how and when can you be friends with the ex?