Wait, don't you mean homosexual?

I was just having an inane conversation with a co-worker (who I like, in that generic co-worker way) about tip jars at the drive-thru window of fast food places and why drive-thru windows won't serve people who walk up and suddenly in the midst of some observation I make, she says, "yeah, that's gay."
I said, "well, I wouldn't call it THAT."
She of course says, "oh, I didn't mean it like that, I mean it like..."
and then I interrupted her before she could say the words 'stupid' or 'dumb' and said, "if you want to call something that's great and fabulous 'gay', I can get behind that. But not the other way."
"I didn't mean to offend you."
"I'm not offended, I'm just telling you that's not how I would use that word. It doesn't make sense to me the other way."

Then it got kinda awkward and I would have walked away except she was in my office. So instead I changed the subject to the work thing she initially came into talk about and she awkwardly said good night and I was like, sure, good night! And found the whole thing sort of hilarious. Except now, 10 minutes later, I'm realizing it also totally deflated my energy. What is wrong with people? I mean, use whatever language you want at home, I really couldn't give a fck, but given the millions of words available to us, how about in a work environment, we pick ones that have possibly a less problematic or loaded history? Is that really so hard? Apparently so.

Maybe I'm really just mad that she thinks I'm straight.