"I've read much spicier things on Ao3" is a common thing I hear about my work, and my polite response is usually, "That's because Ao3 is non-profit and heavily anti-censorship, and authors won't lose their source of income for writing about fucked up gay tentacle porn in the Algorithm finds them." (or if someone reports them. Because yeah, that's a thing people do too. The snitches.)
The annoying thing is you'll find heterosexual erotica in abundance on Amazon. Hell, you'll find it in the Romance genre.
But if you're writing sweet queer media? Fuck you, better hope the person doing approvals that day isn't a cunting homophobe.
And it's not just the Zon doing this. It's all of them.
We're in the bad place.
I remember a few years ago that an indie author I sometimes read contacted the Amazon that her book had been categorized as erotica instead of romance. Amazon removed the listing because whoever was contacted assumed the complaint was in part because the book contained _erotic_ content. The book eventually got relisted correctly but that's just silly.
Yeah, it is, unfortunately, a thing. And getting thrown into the erotica dungeon can really hurt your sales/marketing ability if you can't get out.
Like, erotica readers will always find what they want because they go looking for it regardless of what's trending, but if you're a romance author who has been mis-genred by the system, and you're getting your reach actively suppressed by the algorithm because the algorithm thinks your work contains bad-naughty content, that's a problem.