Well, I haven't played Golden or Arena so the only information I'm working off is the original. Though, Arena was developed by a different company so I'm not sure how... much stock I'd put in their character developments.
In Kanji's social link we get more detail into why his shadow would say that. He was teased as a child for liking girlie things like sewing and arts and crafts. He changed his image into the tough guy we see as a result. The whole storyline isn't just about sewing bunnies. The storyline is about Kanji accepting that there's nothing wrong with liking those things and that it doesn't make him less of a man. The two are very connected.
I don't see the connection between a hobby and sexuality - at least not to the same level that it is presented in the game. The original point that he's being teased about is sewing and painting - if the question is about his gender and hobbies his dungeon would be better represented by presenting him more like... well... Martha Stewart instead of Hardo Gay.
Why does Labrys's shadow organize a tournament to kill people if all she wants is friends? Why does Rise's shadow prance around a bikini if Rise wants people to like her for who she is? The shadows and their corresponding dungeons are sometimes a mockery of their true feelings.
Unfortunately, I don't know anything about Arena but Rise's dungeon was her fear that she was only popular (and thus accepted) because of her body. Her Shadow was fully embracing that, almost relishing in the fact that she was being adored because she was beautiful while Rise seemed to reject that she would take pride in her looks. I thought that Rise did admit that she liked being seen almost like a sex symbol but that she also wanted to be more. At least, that was my understanding of it. I don't remember her social link very well.
I'd say that the bathhouse theme is a reflection of Kanji's desire to be manly and a symbol of his aversion to girls as a result of teasing as a child. After the fight his shadow pleads, "I don't care who… Won't someone, anyone, please accept me…?" Women aren't allowed in a men's bathhouse, so I'd say that the bathouse represents a place where no woman could tease him. Kanji's shadow specifically states that men are superior because they won't tease him, not because of sexual attraction.
Errr... I believe that bathhouses in Japan have a fairly strong association with "down low" homosexual activity. Also, if we're taking Shadow Kanji's words at face value he makes a number of insinuations during the first half of the dungeon about finding a man to know that seems pretty clear he means in the biblical sense.
Doesn't the bolded sort of prove the point? If Kanji was struggling with sexuality then he'd have to accept that to gain his persona. He never does because he didn't need to accept his sexuality. It's pretty obvious from the story that Kanji likes girls. The nosebleed he gets when seeing Yukiko and Chie in their bikinis, the way he treats Naoto during the ski trip, his later confession to Naoto in Arena, etc. I don't think the dungeon is misleading so much as some members of audience misinterpreted the subtext. The whole idea that Kanji is gay/bi seems so widespread despite the flimsy evidence and contradictions.
It seems the only thing you have to accept to receive your persona is that your shadow is you, which Kanji does begrudgingly but then tries to warp into some general acceptance amongst his peers. I'm just not buying that, if you're straight and have a semi-effeminate hobby, you're going to start dealing with queer issues. The nosebleed moment seems to me, as much as any other moment throughout the game, to just be played for comedic effect. I mean, if we really want to get into it, why don't any of the other characters get a nosebleed when they see the girls in bikinis? Does that mean they aren't interested in them? Well... no, because even the Japanese know the nosebleed thing is a joke.
If I remember correctly, there's a moment during the culture fair when the girls are meant to have a swimsuit contest. Kanji seems especially excited to see Naoto in a swimsuit as they'll clear up his "doubts." Which, to me, suggests that he himself is at least struggling with his sexuality.
As a final point, if he is so sure of his sexuality I don't see people making fun of him about it having any impact on his inner demons. My friend gets called queer all the time because he's somewhat effeminate but it never bothered him because he knows he likes women. He never had the extreme "oh I've got to prove myself to my friends!" reaction. It doesn't make sense to throw up a whole bunch of sexual imagery in a person's mental dungeon if it isn't an issue for them in the least. Kanji's actions always felt like he had to convince everyone that these feelings weren't actually true and that's why he acted so unnaturally during the camping trip, vacation to the other school, the sleep over at the inn etc... It comes across as extreme machoism and bravado in an attempt to hide himself as something he's not.
I don't really see it as a missed opportunity, but then I honestly don't know what the intent of the writers were and what the process in creating his storyline was like. Given that Catharine had a trangendered character I'd like to think that Atlus just didn't actually intend on Kanji being bisexual or gay. I don't think they're afraid to tackle the issue.
tl;dr Long post is long and even as bi-gamer I'm not keen on the Kanji is gay interpretation.
I know that the translation team "changed" some of the dialogue when they brought it over to America so that really interferes with knowing what the original design was.
""We did encounter a small number of sexually oriented instances which we decided to make more subtle, but the meaning of everything is still intact," Namba said."
http://www.escapistmagazine.com/news/view/89016-Is-Persona-4s-Kanji-Gay-or-Not
The Catherine character is interesting in that it was handled better but was still used primarily for comedic relief. The only other instance, I'm aware of, that Atlus has dealt with gay issues was another moment of "they may be or they may not be, it's all up to fan interpretation!" in the second Persona game. I don't know if that means that they're unafraid of dealing with the issue or not. I do know that the topic is not as widely accepted in Japan as it is in America so who knows what their stance is on the issue.
As a bi-gamer myself, I just don't see how Kanji isn't at the very least bi too. On the one hand, it's nice for these issues to be addressed in the games, I just wish they didn't fall back on some stereotypes like "oh he likes girly things ergo he must be queer!" Personally, I think his struggle would have been more sympathetic if they did take a hard line on his sexuality.
tl:dr - It is just a video game character so in the end it really doesn't matter. It would be nice if the issue was dealt with well, though.
Ok this is the thing that always bothered my about Kanji's shadow. This has always been the opposite in my experience. There is nothing more homophobic than a teenage guy as Yosuke proves over and over again. Put too much effort into your appearance, take part in some sort of traditionally feminine hobby, or do just about anything that doesn't match the the traditional standard of "manliness," and at least half of the guys at school will call you a f*g. Girls on the other hand always ate that shit. The sensitive slightly effeminate guy was always surrounded by girls. Is it just the opposite in Japan or something? Again, Yosuke seems to prove that guys over there act the same as we do in the states. Is there something I'm missing?
No, it's not really opposite in Japan. I believe the effeminate guy in Persona 3 made references to friends that are girls. From personal experience, guys really aren't all that manly in Japan and that seems perfectly normal. At least, they definitely don't hold the same qualities as the west does about what is masculine. I saw a lot of kids show affection amongst themselves and painting wasn't really considered a feminine pursuit. Don't know about dolls though, none of my kids were that talented. To be fair, I worked a middle school and not a high school so maybe things were different there.
