The conversation was yikes but Herbert wasn't being intolerant.
Duncan was being a little bitch but Leto put him back in his place, it's just that he did that with an incredibly wild take for why homosexuality is natural. However for an old straight man of the time period I think Herbert gets a pass.
There's also the whole thing with the Baron Harkonnen being a literal pederast but that was like peak Haye's Code era so I can get over it personally.