it's mentioned the whole gay thing is mostly prevalent in the country's noble society. Commoners are still mainly straight. And yes, the noble women are largely expected to serve as babymakers for the gay nobles.
It's also implied the gay thing may be magically enforced by a higher power. There's a webnovel chapter where 2 palace guards talk about how their colleagues all suddenly turned gay after several months in the capital; but they were all previously straight coming from the countryside.