This was the episode I gave up on the show.
I don't have any problems with Steven acting like a girl, that doesn't bother me (unless it's shit like >>97312363
since not even gays walk like that, that's how you walk when you're making fun of gays, it's fairytale princess tier mannerism).
What bothered me a lot is that Beach City is apparently "SO PROGRESSIVE <3" that they saw a chubby 14yo in drag come on stage, and no one, absolutely no one was weirded out or laughing at him.
If he got out and people laughed or something, and he paid no attention to that and just kept singing, until everyone gets on board and change their minds, that'd have been MUCH more believable. But no, apparently Beach City is UltraCanada and they just love that kind of thing.
That's when it became 100% clear that the show is just trying to push agendas, not tell a story or even try to teach people about tolerance. It's just an echo-chamber for the disgusting group of people that fetishize homosexuality instead of treating them like normal people.