Bear in mind that homosexual acts were illegal in UK until 1967

There are lots of songs about poaching and piracy, which were even more illegal. The problem with songs about unstraight sexuality was that they violated commonly held mores. Legality didn't come into it - the law simply reflected general public opinion.

But you don't have to go all that far to find cultures where it's different:

https://en.wikipedia.org/wiki/Femminiello

The southern Italians found ways of tolerating - in fact celebrating - modes of being that the British couldn't handle.