Every gay magazine had an article on The Nude Scene, with a screen shot. This was before you could buy a DVD or stream the movie, so every gay guy in the country, probably in the world, marched down to the Cineplexto see it. Gere plays Julian, a hustler who specializes in women, and in fact rejects any assignment involving "fag tricks." The plot involves Julian falling in love with one of his clients (of course), and being framed for murder. (He was with a client that night, but she refuses to come forward.)
Gay men of the era didn't mind that the hustlers have 100% female clients, while in real life 97% of their clients are closeted gay/bi men. They were used to being erased.
They didn't consider homophobic slurs a problem. You weren't allowed to mention gay people, even in slurs, before the 1960s, so in the 1970s and 1980s, most movie characters threw in a few "fags" and "fruits" to demonstrate that they were cool.
Nor did they get upset when the villain turned out to be gay: Julian's pimp (Bill Duke), whom he pushes out a window to his death. Straight people hated us; it was a given, a simple fact of life. You couldn't escape it, unless you managed to live and work in a gay neighborhood and avoid mainstream media altogether. The rest of us would hear homophobic jibes, slurs, scandals and jokes from family and friends, from coworkers, from random strangers on the bus, so what difference did a movie make? You got to see a dick on screen!
Writer/director Paul Schrader has been involved with a number of other homophobic projects, such as Mishima: A Life in Four Chapters, about the gay writer who developed a fixation with bodybuilders. Again, being gay is all about darkness, destruction, death. Being gay is evil.
In an interview in Entertainment Weekly. Gere reveals that he took the part because Julian was so different from himself, into fashion and languages (which Gere was not), and with "a gay thing flirting through it," and he knew nothing about "that community." Good enough explanation, I guess.
In 2022, an American Gigolo tv series appeared. 15 years after the events in the movie, the middle-aged Julian (Jon Bernthal) tries to find out who framed him (I thought Leon confessed?) and to reconnect with The Girl of His Dreams.