There's toxicity and then there is plain homophobia. Ran into a few random teens (I'm guessing their ages and they were British, going by their accents) on the Ferry of the Damned and when they saw my ginger afro haired and bearded pirate one exclaimed "Oh look, it's gay Bob Ross", followed by two of his mates shouting the slur beginning with F over and over. While it didn't affect me personally, and I don't report everything just for being toxic, I'm an ally and I have a zero tolerance policy on homophobia (as well as racism). I simply said I was going to report them and said goodbye.
Unfortunately, when I went to check the Xbox App for recent players it hadn't updated in 3 weeks (SOT being the only Xbox game I play), and I had turned off the DVR for performance reasons.
So I guess these homophobes get away for the time being.
Sad story but, thankfully, that's few and far between in the game in my experience.
And, yeah, sooner the better recent players gets fixed (I know Joe Neate said they were working on it).
