Would I be crossing any lines by asking my girlfriend not to masturbate while thinking about other people
Did she actually tell you she did this? I am amazed at her honesty.
Yeah, I could feel her masturbating and I'm pretty sure she was thinking of another guy.
I would not worry about it either way. She is still with you and that is all that matters. Be aware that sometimes things like this can mean you are doing it to her too. Not accusing but realize what is behind this too for your own sake. Fantasies are fine though even if you think they are not.
She needs to stop it.
I think you might be overthinking the significance of her fantasies. Don't you have a fantasy that you would never consider actually taking part in? These fantasies are really no threat to you.