Do the characters believe Will is gay?
We know the Duffel Bags cannot write the word ‘gay’ in their script. I don’t believe Robin called herself ‘gay’ or ‘lesbian’ when she come out to Steve. Steve stated “how could you like Tammy if she was a girl?” Which it was her way of saying ‘I’m gay’ to Steve.
We know Will is hinting in his coming out scene that he was different. Yeah, he mentioned that ‘he doesn’t like girls’. I know some general audience like to believe Will is ‘straight’ because he didn’t say the word ‘I’m gay’.
After the whole sorcerer scene and Will’s power, the characters might already know he was different at the point. I don’t think Will mentioned a gender when it came to talking about his ‘crush’.