As far as I have seen things, Valve has the Mercs employing the policy don't-ask-don't-tell. They May be gay, they may be straight, they may even be asexual. The thing is, no one is completely sure in any direction. Medic, RED Demo and BLU Spy are "confirmed" as much as capable to have sexual relations with a female and RED Heavy has been registered as stating he has a fascination for women with Red Hair in Poker Night at the Inventory.
Besides, this is set in the 60's were any homosexuals would be so far in the closet they could give Tumnus a high-five lest they get horribly beaten, raped, killed or a mixture of the three.
Free-love only w