It's not necessarily openly approved of, but it's definitely around. Typically it's not considered polite to talk about it.

Basically, bottom line is with so few humans left, Union is pretty involved in the "have babies" thing, so so long as someone gets married and has babies, whatever else is their business. Naturally, there's a bit more leeway with Enlightened and Trainers.

Regarding the secret gay bar, definitely such a locale wouldn't be viewed... highly in mainstream society, necessarily, but it could absolutely exist so long as it was at least marginally on the down low.