Their policy clearly does not single out lesbians
"As stated in the Xbox Live Terms of Use, a member may not create a gamertag or use text in other profile fields that include comments that look, sound like, stand for, hint at, abbreviate, or insinuate content of a potentially sexual nature. Profiles that do are asked to change the language and suspended until changes are made. In regards to sexual orientation, for gamertags or profiles we do not allow expression of any type of orientation, be that hetero or other. Players can, however, self identify in voice communication where context is more easily explained to all players involved.
"Harassment of any kind is not condoned and is taken very seriously; we strongly encourage Xbox Live members to immediately report inappropriate behavior through the compliant tools in the service so that it can be investigated and the appropriate action taken."
"The Xbox Live community grows daily, and we continue to explore methods and levels of enforcement to enhance the ways our members connect and have fun, while adhering to a code of conduct that encourages respect and keeps the service safe and fun for all our members."
http://consumerist.com/5161145/microsofts-policy-regarding-identifying-sexual-orientation-on-xbox-live