I think they used them well to show the various gradations of acceptance and intolerance going on in the Reich and the Japanese Pacific States. It's an exploration of the "what ifs" of a bad outcome in WWII, and I think showing what would be happening to the homosexual populations would be an important part of that.
They were clumsy in having two characters "come out" in the same season, particularly as we had seen one as (mostly) heterosexual in the previous season (although, her hedonistic lifestyle does make her "coming out" hardly a surprise). It would have been a better move on the writers' parts, however, to at least hint about the other character. I thought he was into Juliana at one point, so his coming out was a bit more of a surprise for me and felt out of left field.
But, again, it does fit within the themes of the show, to point out another important difference between the era of the Reich/Japanese Empire world and our world.
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