From the roots fag- meaning gay and agnostic meaning indifferent. A person who is fagnostic isn't really gay, but isn't really opposed to the idea. Most fagnostics are closet cases or 'three beer queers.' Also, refer to 'hipster.'
Co-worker #1 "Look there's Jim, I heard that he's gay, someone saw Todd blowing him at the Christmas party."
Co-worker #2 "No, Jim's just fagnostic, he'll take oral from anyone when he's drunk, he's got a girlfriend in Canada."
1. "Being gay is immoral and unnatural!" shouted the fagnostic fundamentalist.
2. Sure he may be a practicing fagnostic now, but he dresses well, has several key mannerisms, and watches musicals and Glee. He'll soon wake up with the realization that he likes cock.