DarrkPhoenix: There is a lot of borderline behavior that may or may not constitute sexual harassment. However, once an employee calls out such behavior as making them uncomfortable and asks that it stop, then any further behavior along those lines most certainly constitutes sexual harassment and a hostile work environment.
You pretty much nailed it. There's no clear definition what exact actions can be considered sexual harassment (touching someone's hair, telling him/her dirty jokes, telling someone how sexy he/she looks), but after he/she has made it clear (s)he doesn't want such attention anymore, it should be respected from there on, if at all possible.
Even if it was something seemingly ridiculous like "I don't want you to look at me when you pass me on the corridor" or "I feel uncomfortable if you take the same lift as me". The problem should be tried to resolve (with manager, if applicable), ie. why the other one feels uncomfortable in those situations and can something be done about it, and not try to thrown gasoline to the fire with "I couldn't give rat's ass how you feel, in fact now I'll make sure there will be more situations like that.".
That's even worse when your manager does that, because you're supposed to be able to trust their judgement. Also, in this case the manager even seemed acknowledge himself that his actions could be considered vulgar and sexist, but he just couldn't care less.
I have faced a few cases in the past which in retrospect could be maybe considered sexual harassment (towards me), mainly while I was younger working in a summer job. It is funny how interest from (older) ladies isn't necessarily that positive that porn movies make it seem.