Yeah it was less we realised we made the poor homophobes uncomfortable so we made our own spaces and more that the homophobes literally wanted to kill us so we made our own spaces to avoid being murdered. And even then they came into our spaces so they could find and kill us.
In the 18th century men who had sex with men were known as mollies. Mollies would meet in molly houses (somewhat similar to a modern gay bar). As sex between men was illegal under anti-sodomy law the locations of molly houses were secret. However sometimes the police would discover the location of a molly house then raid the molly house and arrest anyone they had enough evidence to charge with anything.
For example on a Sunday night in February 1726 Mother Clap's Molly House was raided. In connection with the raid Gabriel Lawrence, William Griffin and Thomas Wright were all executed for sodomy. Ecclestone died in Newgate awaiting trial. William Brown was found guilty of "Intent to commit Sodomy" and was sentenced “to stand in the Pillory in Moorfields, pay 10 Marks, and suffer a Year’s Imprisonment.” And Margaret Clap was found guilty of “keeping a House in which she procur’d and encourag’d Persons to commit Sodomy” and sentenced “to stand in the Pillory in Smith field, pay a Fine of 20 Marks, and suffer two Years Imprisonment.” (see Trial of Gabriel Lawrence, 20 April, 1726; Trial of William Griffin, 20 April, 1726; Trial of Thomas Wright, 20 April, 1726; Trial of William Brown, 11 July 1726; Trial of Margaret Clap, 11 July, 1726)
For those sentenced to the pillory the public was not kind. On the 30th of July 1726 the Weekly Journal, or British Gazetteer reported:
On Tuesday, Margaret Clap, who had been convicted of keeping a disorderly House, stood in the Pillory in West-Smithfield, where being unable to bear the Salutes of the Rabble, she swooned away twice, and was carried off in Convulsion Fits to Newgate.
Trans and gender diverse people have always been part of these communities. Princess Seraphina was part of the molly community in London during the 1720s and 1730s. She did "sodomiting Errands" carrying messages between mollies and she was bridesmaid at Moll Irons wedding to an another molly. (James Dalton’s Narrative, 1728) Seraphina would sometimes wear men's clothes and other times women's clothes and it seems many of her friends used she/her pronouns for her although others used he/him.
Mary Poplet, who kept the Two Sugar-Loaves in Drury-Lane, recalls:
I have known her Highness a pretty while, she us’d to come to my House from Mr. Tull, to enquire after some Gentlemen of no very good Character; I have seen her several times in Women’s Cloaths, she commonly us’d to wear a white Gown, and a scarlet Cloak, with her Hair frizzled and curl’d all round her Forehead; and then she would so flutter her Fan, and make such fine Curties, that you would not have known her from a Woman: She takes great Delight in Balls and Masquerades, and always chuses to appear at them in a Female Dress, that she may have the Satisfaction of dancing with fine Gentlemen. Her Highness lives with Mr. Tull in Eagle-Court in the Strand, and calls him her Master, because she was Nurse to him and his Wife when they were both in a Salivation; but the Princess is rather Mr. Tull’s Friend, than his domestick Servant. I never heard that she had any other Name than the Princess Sraphina.
(Trial of Thomas Gordon, 5 July 1732)
Gay and lesbian activism and trans activism have always been closely linked. Late-19th/early-20th century gay rights activist Magnus Hirschfeld campaigned against Paragraph 175 (which made sex between men a crime in Germany) but also fought for freedom in gender expression. Hirschfeld convinced the Berlin Police to issue a transvestitenschein (transvestite licence) for people who were more comfortable wearing clothes of the gender opposite to their agab. He argued that these licence were essential to their well-being and even survival. Hirschfeld also helped people legally change their name to one that matched their gender identity. (The Administration of Gender Identity in Nazi Germany by Jane Caplan, p174)
[Transvestitenschein (transvestite licence) issued to Käthe T., c. 1928, via The Early 20th-Century ID Cards That Kept Trans People Safe From Harassment by Natasha Frost]
The worker Käthe T., born in Berlin in 1910, resident at 8 Muthesiushof, Britz, is locally known to wear men's clothing.
Magnus Hirschfeld was also the founder of the Institut für Sexualwissenschaft (Institute for Sexual Science) where Dora Richter was the first trans women to receive vaginoplasty in 1931.
The transvestite belonged in Hirschfeld's schema of intermediate sexualities (Zwischenstufe) which challenged the dichotomous norm of male and female. For these reasons, Hirschfeld was a target of particular Nazi venom and his institute and its principles of sexual enlightenment fell immediate victim to the new regime.
While trans and gender nonconforming people have always been part of the community there has unfortunately been a longstanding issue with transphobia within the community. Transphobic LGB people have always wanted to push trans people out of the community, even trans people who were actively involved in fighting for gay and lesbian rights. During the 1973 Christopher Street Liberation Day Jean O'Leary (founder of Lesbian Feminist Liberation) tried to stop Sylvia Reveria (cofounder of STAR Street Transvestite Action Revolutionaries) from speaking. Reveria responded with her iconic Y’all Better Quiet Down speech (I'm going to include a excerpt below but I recommend watching the whole thing):
I will not put up with this shit. I have been beaten. I have had my nose broken. I have been thrown in jail. I have lost my job. I have lost my apartment for gay liberation and you all treat me this way? What the fuck’s wrong with you all? Think about that! I do not believe in a revolution, but you all do. I believe in the Gay Power. I believe in us getting our rights, or else I would not be out there fighting for our rights. That’s all I wanted to say to you people. If you all want to know about the people in jail – and do not forget Bambi L’Amour, Andorra Marks, Kenny Messner, and other gay people in jail – come and see the people at STAR House on Twelfth Street on 640 East Twelfth Street between B and C apartment 14. The people are trying to do something for all of us, and not men and women that belong to a white, middle-class white club. And that’s what you all belong to! Revolution now! Gimme a ‘G’! Gimme an ‘A’! Gimme a ‘Y’! Gimme a ‘P’! Gimme an ‘O’! Gimme a ‘W’! Gimme an ‘E! Gimme an ‘R’! huh— Gay power. Louder! Gay Power!”
O'Leary would later regret the way she treated Reveria and other trans women:
Looking back, I find this so embarrassing because my views have changed so much since then. I would never pick on a transvestite now. In the late seventies, I stayed at a hotel in Florida that was full of transvestites and transexuals. They were wonderful, darling, loveable people who I got to know as people. I got to know their lives and their stories, who they were, why they were.
O'Leary also talked about excluding trans people in gay rights activism and the hypocrisy of doing that while fighting against the exclusion of lesbians in the feminist movement:
I was involved in another conflict with transvestites around this time. It was very painful. We were working on getting the gay rights bill passed in New York City, trying to structure a bill that would be passable. Early on, the transvestites wanted to be included in the bill as a protected group. Politically, we had to say, "This doesn't work. We are never going to get the bill through the City Council if transvestites are included in the bill. This is not what our battle is about. It's about gay rights, not transvestite rights. We're talking about being able to love someone of your own sex, being able to have a relationship. This is not about how we dress."
So the transvestites were excluded from the bill, and they never got reinstated. It was an extremely hard thing to do; it was horrible. How could I work to exclude transvestites and at the same time criticize the feminists who were doing their best back in those days to exclude lesbians?
(Making History: the Struggle for Gay and Lesbian Equal Rights, 1945-1990, by Eric Marcus, p266-267)