handles sexuality with sensitivity at first (Kanji Tatsumi), but ends up making the potentially-queer male character the object of jokes in pretty much every post-original-release piece of media. At first it's Kanji exploring his sexuality, not wanting to be gay, but accepting that his over-the-top queer shadow is a part of him, that he can be manly while still liking "girly" hobbies, and admitting he's attracted to another character (Naoto Shirogane). Naoto presents as male but is revealed to be female; Kanji maintains a crush on her regardless, meaning that a lot of people read him as pan or bi. Unfortunately, with Yosuke Hanamura--the best friend character--being homophobic... well, he matures throughout the course of the game and stops making fun of Kanji for his potential queerness, but every spinoff/sequel/whatever ends up having Yosuke continue making fun of him/being wary of him due to queerness. For context, though, it's pretty clear that Yosuke was originally intended to be a romance option for the protagonist, who can only be male--there are
cut lines that even got English voice acting.
Here's a tiny bit more context, too.
Naoto's entire arc can be read as transphobic, too. Her storyline is meant to be a critique of the strict gender roles that Japanese society enacts; Naoto is smart and wants to be a detective, which is a traditionally-male profession. She disguises herself as a man and lives life as a man, with her social link (basically, her side-story) revolving around her exploring her gender and figuring out how to feel comfortable in her own skin as a woman that identifies as a woman but is forced to present as male. Her shadow plays the role of a mad scientist, with a secret lab being the dungeon it runs, and it uses "mad science" as its approach to sex reassignment surgery, which isn't great. It's all because Naoto does NOT want to be a man, but given that reassignment surgery is portrayed as mad science forced upon otherwise-innocent people in Western society, it ends up having some pretty transphobic connotations.
Finally, it does end up revealed that the characters' shadows are less about the person's repression and more about how society views that person; it's a little ambiguous on if the shadows are a hybrid of both or if they're ONLY society's reflection.
