It's an outdated and, I think, generally benign euphemism for being gay.
An anecdote: some friends of mine were in Providence some years ago to see Uncle Tupelo, a favorite band. They were grabbing a beer before the show, and in walks Jay Farrar, the guitarist. They say hello, and Tweedy tells them how a moment before, he'd been having a beer in another bar, when he noticed it contained only men, and that some of them were making out. He'd inadvertently walked in to a gay bar. Not being gay, he finished his beer and left. His description of the clientele: "I think some of them were a little light in the loafers."