Well, it's just for Shadowhunter PCs, for one. You can be a gay vampire or mundane and have no issue whatsoever. I think the 'don't react' is more of a: don't sit on channels and accuse staff of being homophobic for retaining this aspect of theme / don't go around acting like staff is attacking you IRL for this.
And, I mean, some people like to RP that. I've encountered a few players over the years who are so obsessive over playing the person persecuted for their sexuality that they've convinced Staff to let them subvert theme (such as: the overall theme is that homosexuality is totally OK, but they somehow managed to be super persecuted by the society in game that is... accepting towards everyone else). So, for some? Might be a great theme to play.
The policy could use some improved wording, I agree... But it appears it's a) only in affect for one group on the game (not the game overall), and b) basically going 'This is just us retaining what we felt was an important part of theme. Staff is LGBT positive and we support your RL lifestyle. Please don't lash out at us or other players for what happens IC.'