Toya is confused about why "he" would be so embarrassed about being seen naked by another man and concludes that "he" is gay, adding Not That There's Anything Wrong with That. Kaori is irritated by this but plays along, but when Touma and Toya accidentally walk in on her bathing, she angrily attacks them with her sword and they barely manage to escape. Due to the Angel Fall spell, Touma's father Toya sees Kaori Kanzaki as Stiyl Magnus.
The humor here is Szayel Aporro, an effeminate pink haired man, being alarmed about being hit on by another man.