Ahahahah! Good one, maybe next time [exaggerating your expression like if this was definitely a joke]. So, do you like extra dark chocolate or white is better?
In other words, dodge the proposal. It's so out of every social norm that you don't even need to think that they were serious. It was a daring proposal of them, as Bob's reaction underlines (not a clear "yes let's do it"). Let them know that they are alone on this.
Also, it's easy to push somebody to do something uncomfortable, less easy to do it:
Oh nice one Alice, you go first and I'll follow, OK? [Said with a sarcastic/exaggerated tone that implies that you won't]
This is a good way to deflate the situation, it puts Alice in your shoes, even if jokingly. This can be a risky approach and it's safe to be pulled if you feel that Alice wouldn't give her consent to random fondling. If she does, well, time to cut down the humour:
Huh wow, things are getting weird here, I'll leave you alone, OK? Bye, enjoy yourself mates.
Not-so-on-topic reflection : Hadn't I known the age of the three people involved in the situation, I'd have though of some clumsy and teenage-y manoeuvre of Alice and John to get you and Bob closer. Might it be that he likes you and Alice and John know it?