We basically know nothing about Harald Fairhair, including whether or not he existed. He doesn't show up until much later sagas, and in many ways may have been mostly used to retroactively justify Norwegian independence from Danish rule. Certainly his various kids in the sagas have more to do with a desire to prove descent from a prestigious founder than they do any actual genealogical history (by saying, "oh yeah, my ancestor/hero/whatever was descended from Harald Fairhair too; you just never heard of this other son he's descended from").
As for gay Vikings more generally, the fact that something was shunned/criticized/etc. doesn't mean it existed. Homosexuality was shunned/criticized/etc. in many cultures (certainly including Christian medieval Europe), and yet still existed. Particularly in-game, it represents who a character is predominantly sexually attracted to; you can still marry, have kids, or even seduce someone, you just can't end up lovers/soulmates with someone of the other gender. Given that same-sex attraction seems to be genetic, it would still have been a thing in medieval societies, including the Norse, regardless of whether or not it was culturally accepted.
More broadly, given that Fairhair's orientation is randomly generated, who particularly cares? It will change again next patch.