As far as I know the Witcher series has two gay characters. In Witcher 2 a wizard betrays the good guys. He's subsequently show with a half-naked male slave, squeezing his pimples. The designers explicitly said they intended to make him as despicable as possible. His sexuality serves to make him even more disgusting to the presumed straight player, much in the same way bishonen and sissy villains were meant to do for decades. The wizard is killed but he can also be castrated for good measure. It is indeed one the most homophobic games of the last years.
In Witcher 3 Geralt can find a hunter in the wilderness. He is described as freak. If the player inquires the hunter will explain that he fell in love with the son of the local lord. Said lord caught them and the son killed himself. The lord became an alcoholic, his estate fell into ruin. And the hunter now lives in the wilderness alone because he is a social outcast. This is by no means a positive representation.
Ciri is an entirely different matter. While this was not the case 20 or 30 years ago, the current ideal of heterosexual masculinity dictates that straight men must think lesbians are hot. The reactions towards lesbian characters in games is nowhere anywhere near as negative as those toward gay characters.
I just watched that scene (search for 'uncle roche meets uncle dethmold'). I don't think it does that at all.
If it is meant to show him as a disgusting character it's because his slave is physically repulsive, and because his manner with the slave is repulsive, and also the slave's obedient manner is quite repulsive. It has very little to do with the fact that his slave is male in my view.
Maybe you're the homophobe, because you're seeing a scene portraying two repulsive characters showing repulsive behaviour, and all you can fixate upon is the gender of the characters. Presumably, if the slave had been female, you'd have had no problem with the scene? What does that say about you?
Maybe it's the case that developers simply cannot have two repulsive males in a master/slave scenario because critics will instantly accuse the developer of using the slave's gender as a weapon.
You seek to shackle artistic creativity in the name of social responsibility, but I think it's a dishonest facade.
When it is the only instance of a gay or bisexual male character in the entire game then looking at the scene in that light is completely justified.
Obviously there is nothing wrong with having gay, bisexual or effeminate villains, but when they also happen to be the only male character who isn't straight then obviously that has really negative implications.
I get the feeling that if there was a game where the cast was almost all powerful female characters and the one male character was an evil, bumbling idiot you would be the first to point to his gender and call the game a shameless agenda-driven piece of work.