Okay, I'm gonna be controversial here. I can kinda see the whole "it's a woman's penis" angle's logic. It is, however, deeply flawed.
If you like a bit of finger up bum from your missus, that's not gay. If you're imagining Tom Cruise doing it, that is. So it's the who not the what that matters, right?
The question then becomes how you're defining gay (eg being attracted to men), and how you define what a man is (eg having a penis OR simply identifying as a man).
The logic is that if being gay or straight is strictly limited to being attracted to a particular gender, then it's irrelevant what the body looks like. That's blatantly ignoring the fact that there are physical signfiers associated with gender and that form the basis for attraction. It's a massive simplification. I'm not just attracted to women, I'm attracted to all the bits that I've come to associate with the standard category of woman. So if someone turns up with different bits, it causes a bit of cognitive dissonance that isn't really conducive to attraction.
So yeah, this person is stupid as hell.