You're friend might be afraid of "gay" touching, I wouldn't know. But I do think that can also be an easy way to explain away someone's boundaries without understanding the complexity of the behaviors involved.

I have fairly strong boundaries, and as a general rule I don't want people hugging me. This isn't because there is something sexual about the hug, but because I don't want the unwelcome close physical contact. A lot of people get to the point of welcoming that kind of contact faster than I do, and that's fine, good for them. But that doesn't make my comfort level less valid. And critically, one thing that makes it so hard is the social expectation, the idea that there is something wrong with saying no, and the implication that you should let people do these things that make you uncomfortable. In fact some people will ignore those boundaries and act like it's doing you a favor, as though willfully inflicting themselves on others is supposed to make people less defensive.

And yet, if someone is having a hard time and needs an arm around their shoulder, I'm there. I will absolutely hug someone who is hurting and needs to be comforted. I'm a very caring person, and I don't have a problem with that kind of physical contact when it's for someone else's benefit, as long as it's my choice to offer it.

Sexuality only really enters into it in that a bit of sexual attraction can also quickly overcome those boundaries. It's easy to welcome intimate contact with someone when a primitive part of your brain is trying to nudge you into doing whatever it takes to get this person naked and pressed against you. It's a specific desire overriding the general preference for boundaries, not the context for all physical contact.