With superheroing taking up most of his free time, Matt isn't really able to hang out with Foggy all the time like they used to. But Karen is. And though they're just good friends, Matt starts interpreting all the sensory data that comes from them as signs that they're together or at least going in that direction. And he's crazy jealous, because Karen is a nice girl and a great person and she might be it for Foggy, when he always thought Foggy and he would get their shit together eventually. In truth, Foggy has been in love with Matt since college, but has never had the courage to say it. Absolutely NO hating on Karen, thanks.