This is a difficult one. One thing that jumped out at me is that you both would be unhappy if the other had sex with someone else. I know you are both not wanting a relationship and both want it to be casual....but personally, deep deep down I think maybe neither of you are looking for open and casual but are just both wanting to take things very slowly with each other only. This is a form of commitment, albeit a smaller, gentler one?
That is okay....in fact, any way you decide to have a relationship is okay. Of course, things will always change if you change them. I personally think it is possible to go back to being friends afterwards, however it will depend very much on the people involved and how they feel about the whole thing. If you are both completely "fine" about no strings sex, then I suspect you are more likely to go back to being friends, but your comment about "neither of us would be happy if" suggested you guys are already thinking "possessively" of each other and things could break down if one of you went "Well we said we were casual, so I am off to sleep with X"
In other words, I think there are some feelings between you other than no strings sex, because you both care about your friendship and you both care about the other sleeping around.
When I read this, my first thought was "This is the beginning of a slow, gentle introduction to a relationship...between two people who are maybe wanting to hold onto freedom a little longer, or have been hurt and feel a bit nervous about jumping in head first."
My point is, maybe it will not go back to being friends, but maybe that is the journey you two are supposed to take! It could end in a relationship, or in nothing, but if you don't take those chances it will always be "nothing" because you ruled out the chance. Does this make sense?
If this feels good to you both right now...then I really recommend following your hearts or lust and having this time together, whether it develops more or fizzles out, it will be a memory you remember and not a regret as to "what if we had?" You know?
I simply recommend one thing, in situations like this: communicate communicate communicate. Be honest and upfront with how you feel and what you want and also understand that over time, those wants and needs may change...so be honest again. It is better to walk away from something that is simply not going to work for you, than to keep your feelings secret in case you "scare them off" and you are always only receiving half of what you need and want.
Follow your heart/head and keep things real and honest and you will have no regrets xx
Hope that helps xxx