Yeah.. It's not that it isn't considered as an insult, within the battle-scene on the other hand.. It's a weak insult, it doesn't really sting since the concept of gayjokes is played out, ya feel me? It's hard to pull off a gayjoke when it's already been done 100.000 times already.
Try to keep your gayjokes to a minimum or at least consider what i said above Even better.. Search up GrindTime battles with people like Illmac, TheSaurus, Dirtbag Dan, Mac Lethal, NoCanDo, Madness, Dizaster, Kid Twist, Fresco etc. and study how they build up their punchlines.
http://www.youtube.com/watch?v=65gJB2bvHMk