It's calling a man effeminate as an insult. That's not solely used to stigmatize gay people, but that's one of its main uses, along with stigmatizing gender-nonconforming people. I don't see much of a way to salvage it as anything but a right-wing, culturally reactionary term, any way you spin it; at best, it's imagined-1950s-gender-role garbage.

It was used when I was a kid too. But when I was a kid, people also used the words "Jewed" and "Gypped" to mean "got ripped off", and "gay" to mean "bad". In retrospect those those were all... not so good. And now I'm an adult who is capable of reading and gaining knowledge about such things.