Friend can use the word fag out of context, even though it's roots are awful - and I'm bisexual myself. I've said many times don't say it, don't say nigger, don't say kike... but just in general insults or rage that's alright :/
That shit was rampant when I was like 12-15yo (which was in the early 2000s). Even I did it because it was so normal. Haven't heard it used like that in a long time, fortunately. Most people here seemed to wise up on that really quickly at some point.