What are Henry and Natalie doing in Act 1, Scene 4? Who watches them?

In Act 1, Scene 4, music plays (mid-tempo, acoustic guitar and strings) as Henry and Natalie smoke marijuana in Henry's room and he tries to convince her that he could be a good boyfriend for her ("Perfect for You"). Time moves forward as, on one of their dates, Diana watches them and Gabe confronts her about spying on them.