I can’t speak for Bill Clinton’s thoughts but the military never engaged with it in good faith. They considered any discovery as “telling”. Some service members at the time even described unit members spying on their homes to see who they lived with. Even a letter from an old lover that someone took from your belongings would be considered telling. The function of the policy was that if they could “out” you, they would discharge you with bad papers.
Under this kind of atmosphere homophobia becomes ten times worse because the possibility of that guy being gay puts your career at risk too, in case you get too close and are swept up with them.