Foggy most likely would've given Matt a chance to explain.
Now one has to understand the context Karen is working with to jump to "Matt's a sleaze". So, she goes to Matt's apartment and ends up seeing Elektra in his bed. That's easy to misunderstand as something it's not. The fact that he's at her side, not lying in it, and both are fully-clothed, less easy to misunderstand. But meeting Stick and therefore knowing he had other company, well... you wonder how she jumped to "he must be cheating" from all that, and what exactly she saw when it came to Stick.
But think about it from Karen's perspective: as Karen sees it, Matt's been avoiding her calls for days now and bunking off work, constantly refusing to tell her or Foggy where he's going or what he's doing. When she tries to find out for herself she finds Elektra (albeit fully clothed) in his bed. I imagine Foggy presumably kept bringing up the joke of how Matt sleeping with a lot of hot women despite being blind, which probably didn't help. I had the same thought when I first watched the scene (Elektra's fully clothed, Stick is there), but here's the thing about humanity: we often assume the worst in people when we're already suspicious of them (consider how in Luke Cage, Misty Knight always assumed the worst of Luke until she got shot by Diamondback, and a lot of it had to do with Luke causing problems for other criminals). So for Karen, "Matt is avoiding my calls because he's seeing another woman" probably sounds a lot more reasonable than "Matt, who is blind, is actually the Devil of Hell's Kitchen."
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