Lot of confusion about what is 'gay' here.
Gay is a sexual orientation that's part of the person.
It doesn't matter if the gay person has sex with men, no sex, sex with women (closes his eyes and pretends, whatever).
A straight guy in this three way is straight because of his sexual attractions - whether he stays far from the second guy or bends over and has homosexual sex to his disgust.
I know it's a lot of kidding (repeating cliches that pass for witty).
But with all the ignorance and prejudice out there I think it's worth remembering what 'gay' is, as laws are being passed even today based on people not understanding it.
I think what they mean is that excessive sexual same-sex contact ('the balls touch') isn't gay, but it's scarily, disgustingly, icky, undesirable sexual contact for a straight guy.