Mr. Knightley continues to show an excess of regard for Jane Fairfax, which increasingly alarms Emma. Being a straightforward person, Emma thinks it's better to know the worst than suffer in speculation, she outright asks Mr. Knightley whether he has any romantic inclinations for Jane.

Mr. Knightley's responses are a bit strange, IMO. First of all he thinks that Mrs. Elton is so overawed by JF's mental powers that she would not behave in the same familiar way to her as when she speaks of her. Emma does not agree with him, and neither do I, because we clearly see how impertinent Mrs. Elton is to Jane Fairfax at the Woodhouse's dinner party (Ch. 35). It is obvious that he holds her in extreme high regard.

However, even Mr. Knightley may have become slightly disillusioned with Jane Fairfax's perfection. He says that "She has not the open temper which a man would wish for in a wife." Ch. 33, meaning himself of course. One can suppose that he would have made efforts to overcome what he considered "diffidence" and "discretion" in Jane Fairfax, but was apparently not successful. As an aside, I find it harder to imagine JF overcoming her reserve towards Emma, even if she had made the effort, when it was hard in a long-time well-wisher like Mr. Knightley.

Mr. Knightley takes his time to try clear away the idea of an attachment between himself and Jane Fairfax. But Mrs. Weston thinks he "doth protest too much". I think it is clear by now that Jane Fairfax, at least, has no romantic interest in Mr. Knightley. Perhaps, the rumor of Mr. Cole's hint reached Jane's ears, which is what made her so reluctant to accept Mr. Knightley's generosity.