I reckon it's fair game by the Bayern fans and nothing wrong with it, next you can't sing songs with swear words? It's just taking the mickey out of the banner at ours, similar to the cringeworthy "Welcome to Arsenal signs" for the yid fans earlier this year.
Don't know what world you're living in but that sort of homophobic carry-on isn't tolerated these days, as evidenced by the fine they're likely to cop;
what arsenal banner are you talking about that this is apparently a response to?