I think Hitler tolerated “masculine” homosexuality for a time, at least. The head of the SA (Brown Shirts) was Ernst Roehm, a notoriously open homosexual. However, once Hitler had what he wanted, he killed Roehm and crushed the Brown Shirts.
There is a book called "The Pink Swastika" that outlines a great deal of continuing homosexuality in the Nazi party, especially among those in the SS and the concentration camps.
Some of the stuff you read in that book is sickening. The Nazis were *VERY* homosexual. Most of their leadership was, and many of their SS and SA people were.
They especially wanted homosexuals because they had no compunction about doing absolutely horrible things to people.
The book is well documented, and you can read portions of it online.