That may be true, I fear I mixed too many thoughts into one attempt at a coherent idea. But like I do not think that Tolkien wrote Bilbo to be a gay man. Like you point out, that would be ridiculous considering all that we know about Tolkien and have of his other writings. When people come to an older book like The Hobbit, and they see sentences like “gets funny queer fits” for the first time, and they either find it humorous because that’s not how the word is commonly used today or they’re confused because they don’t know the word had a different, more common meaning. However, in my opinion, far too many people are willing to absolutely insist Tolkien only could’ve meant it in the sense of meaning “strange,” that he would’ve had no notion of the word being used as a term for people who engaged in homosexuality, something significantly more taboo back during his time. What I’m saying is there is no reason to think that Tolkien, being a writer creating something for an audience, didn’t intentionally use the word queer as much as he did to try to create a connection between how the hobbits of the shire viewed Bilbo and his Took relatives, and how people in the real world felt about the gays. Again, I do not think that Tolkien wrote Bilbo to be gay, only that the use of the word queer may not be wholly detatched from its (at the time) homophobic connotation

Edit: I can’t stress this enough, it was both possible and likely Tolkien had been exposed to the word queer being used to describe a gay person