Your uncles are looking back on the derogatory meaning that it once held years ago. Today, it's considered a "reclaimed" word used to describe more than just gays in a derogatory way. Technically it means Odd, unconventional or something that deviates from normal aka strange. Honestly, that describes the homosexual lifestyle IMO.
Gay people can hate the term but the definition still applies so they need put on their big boy/girl pants and deal with it. If you want to "come out" then do it but don't try and force heterosexuals to think or go around acting as if you're just like them. You're not. I have friends and a cousin that are gay and I'd tell that to them too.
In terms of the world colored, I wouldn't say that "colored" is in any way reclaimed. That's just more of a very old-school reference that wasn't mean to be derogatory back in the day but now with everyone shifting to the more politically correct African American phrase Colored is considered offensive to many. I still use and the word black to describe people of color.
Gabe, your quota is filled. :fa: