I thought it was excellent writing, to balance out the lead female characters for a start. But also, from a ballsy move on the part of Suzuki-san and Yoshimoto-san to put such a character into a world of Hong Kong set in the late 1980s. On top of that, into a video game from the early 2000s, which people forget, was a partially different time to how things are today. Fair enough, SOA tempered the character because they were shit scared if their image, but the truth has never really been kept about Yuan's sexual orientation and identity.
Annoying, eccentric, egotistical, flamboyuant, weird, uncool..... but somehow it makes sense. Some could try their best to explain it, some can't. But you cannot deny, in my eyes, the role Yuan has in Shenmue 2. It was nailed. Expertly done. Proficiently executed. Why? Because I couldn't imagine a Shenmue 2 without Yuan.