homophobia du jour

Yesterday I was working with a class of 10-11 year olds, playing Guess Who? It's a good way to get them to have fun while practicing simple questions and answers, such as Has she got red hair? No she hasn't. Does he have a beard? Yes, he has. I would walk around the room, correcting grammar and pronunciation, answering questions like "Madame, how do you say "old", "white hair" ', etc.
One little boy raised his hand, and pointing to the picture of Eric the Policeman, asked "Madame, comment dit-on il est une fille?" How do you say he is a girl?
I thought maybe he wanted to ask a person's gender, so I said, "Well, Eric is a boy's name, right? So you would ask, is it a boy?"
"Mais non, Madame", said his partner with a scandalized shriek; "Il est gai! Comment dit-on il est gai?" No Miss, he's gay! How do you say he's gay?
Apparently "He is a girl" is a French way of calling someone gay. Because the worst insult you can say to a man is to call him a woman.
I found myself trying to suppress a sigh and a laugh at the same time. Because honestly, Eric in his policeman's hat totally looks like an escapee from the Village People. But still. They're only 10. They have no idea what gay means, beyond "stupid". But they're already using it as a slur. Where are they learning this?? Older siblings? Parents?? Sometimes I think homophobia is in the fucking water.
I remember when my 7 year old cousin crawled into my lap one day and asked me what "gay" meant, because some kid had called her that. Not being out to anyone, I found myself trying to explain to her why she shouldn't use it as an insult without making her think it's a bad thing. If I simply said "Don't say that!" she'd get the impression that "gay" is a bad word. But I didn't feel comfortable explaining what gay really means; I didn't want her parents calling me up demanding why I was exposing their innocent darling to nasty homo talk. So I used a convoluted blond analogy. "My sister's a blond and she's not dumb, right? So it's not nice to call someone a dumb blond, but that doesn't mean being blond is bad. Gay's the same thing. It's not a bad thing, but you shouldn't call someone that to be mean to them."
So I was looking at my students, who are giggling nervously, afraid I was going to reprimand them, and I was thinking about my cousin, and I said "Mais, s'il est gai, c'est pas grave." So? If he's gay, it's not a big deal. Now, how do you ask if he wears a hat...?

I'm not sure if I handled either of those situations well, but I wanted to try and treat gayness like a normal variation, like hair color: She is blond, he has brown hair, he is gay. So what?

After class one of my students handed me a note: God Bless Miss. Damn right. That fucker owes me.