[cmeacham98]

Your line of reasoning would make a lot of sense if we ignore the fact that Facebook (at least claims they) would allow the other ads.

It seems likely to me that rather than wanting to hide these specific categories (but be willing to expose every other type of data collection they do on you), that Facebook doesn't allow these specific two categories because of the significant negative social/legal consequences if they get them wrong.

They are very likely trying to avoid gay users getting an ad that says "You're straight, join my Straight only dating site" or an ad incorrectly diagnosing users with a disease they don't have.