Making straight people feel uncomfortable..

Recently I caught up with a friend I haven't spoken with for a few years. We were hanging out with a mutual friend and her boyfriend. Everything was going alright when we started talking about my recent rebound (I recently broke up with my boyfriend). Out of nowhere, the subject went from rebounds to my sexuality. I will call the old friend sally.Sally: You are my favorite gay guy. All the gays I know are so... * insert limp wrist here*Me: uh... k.Sally: what's wrong?Me: Hearing that just hurts me a little bit.Sally: Oh.. I didn't mean to hurt your feelings or anything!Me: It didn't. It was just cringe worthy. It's just not something I like hearing.Sally: I'm so sorry, I didn't realize I was saying something wrong!Me: It's fine. It's just it's the same thing as if I were to say that you are my favorite woman cuz all other women are bitches.At this point, I texted my friend "when you're the only LGBT person in the room and they think it's cute" and told him what happened. He responded, " just tell them they're the least annoying breeder you know." Of course I audibly laughed and they asked what I laughed about. I told them it was nothing but they pushed. So I told them. The looks on their faces were one of the most uncomfortable horror. Having completely ruined the mood, I went home. Now I'm not confrontational, and I avoid awkward situations at all costs. I felt pretty bad about what I said, and feel like I should talk to Sally about what happened. A part of me though, feels a little vindicated and proud of myself for standing up for what I believe. What do you guys think? Should I apologize, or just let it be? Also sorry for format, I'm on mobile.