@Anra7777
In the translation's defense, there is a thing called context, you missed it, sadly."That's gay" basically means "that is uncool", "that is lame" or "that is not cool".
You chose to take things out of context and make into a homophobia situation, however, we are dealing with a name as the target of the phrase.
Even if he meant it, who cares if he doesn't like homosexual people? That is not your problem and the ways of life of other people shouldn't concern you as long as they don't directly abuse another person in regards to his homophobia.
Even then, in context, "that's gay" obviously meant " Evil Dream is a lame name, so let us change it to Nightmare". A name can't be homosexual, it can't have relationships, so your reaction is not warranted.
If people are sensitive to a word that is not directed at them, then they are the problem. He is not insulting anyone at all.
Context matters.
Words have their own definition, but you have to keep in mind that they change depending on the context, even if "gay" doesn't have "uncool" listed as its definition. The intention behind the speaker is important too.