What bothers me is that they brought his sexual identity into his story arc right out of the gate, but once you beat his dungeon it practically goes away save for some bad jokes. If they were going for the whole “man who’s insecure about feminine hobbies and his own masculinity” and intended for him to be straight regardless, why did they bring up his sexual identity in the first place?

It’s not like his character arc in his social link isn’t compelling. If they wanted to portray his actual character arc, they totally could’ve designed his shadow that way, but instead it’s a homosexual stereotype in a dungeon that’s literally a gay bathhouse. The inconsistency is awful.