1. Nondescript language used between gays who are partially out of the closet, to avoid suspicion. Often involves a lot of gender-neutral pronouns and unspecific common nouns.
2. Mutual understanding that semi-closeted gays who are out to each other do their best to conceal the sexual orientation of the other, or, at the very least, does not force the other out of the closet.
(In gay code)
Gay #1: So is the... person you mentioned earlier here?
Gay #2: No, they couldn't make it.
Gay #1: Shame. Do you know if they're... ('not straight' is understood here)
Gay #2: Nope, and that's the worst part, isn't it.