Not necessarily used to describe someones sexual orientation. Often used as an insult in a friendly context without the purpose of actually insulting the person objected to the word. Can also be used as an adjective to describe a certain object, individual or situation.
"Maybe my homolol accent has changed."
"Some fucking homolol decided that he was gonna mess with us."
"It makes me sad homolol."
"I wanna spacedock you homolol."