At what point should a child start thinking being sexual? There is a difference between saying you want to fall in love with someone and have a kid and deciding what gender you're attracted to. At what age it's alright to talk about sex to children at all? This has been a huge thing in schools, where parents don't like when they have sex-ed. And in those cases, which usually take place in middle to high school, I would say, the parent's should've said something.
But I don't see how a corporate product aimed at entertaining my child of under 7 or so should make them ask what they're attracted to. Maybe it will anyways, and I'll deal with that. But I think TL does a noble job of straddling that line. It allows you to put whatever Mii you want in whatever role you want, without asking specifically if they're gay.
Being not-straight doesn't imply anything about sex.
Edit: Rather, there is more to being not-straight than just what you're sexually attracted to.