There’s another dimension that always, always gets overlooked in contemporary discussions about the word “queer:” class. The last paragraph here reminds me of a old quote: “rich lesbians are ‘sapphic,’ poor lesbians are ‘dykes’.”
The reclaiming of the slur “queer” was an intensely political process, and people who came up during the 90s, or who came up mostly around people who did so, were divided on class and political lines on questions of assimilation into straight capitalist society.
Bourgeois gays and lesbians already had “the luxury of language” to describe themselves - normalized through struggle, thanks to groups like the Gay Liberation Front.
Everyone else, from poor gays and lesbians to bi and trans people and so on, had no such language. These people were the ones for whom social/economic assimilation was not an option.
The only language left, the only word which united this particular underclass, was “queer.” “Queer” came to mean an opposition to assimilation - to straight culture, capitalism, patriarchy, and to upper class gays and lesbians who wanted to throw the rest of us under the bus for a seat at that table - and a solidarity among those marginalized for their sexuality/gender id/presentation.
(Groups which reclaimed “queer,” like Queer Patrol (armed against homophobic violence), (Queers) Bash Back! (action and theory against fascism, homophobia, and transphobia), and Queerbomb (in response to corporate/state co-optation of mainstream Gay Pride), were “ultraleft,” working-class, anti-capitalist, and functioned around solidarity and direct action.)
The contemporary discourse around “queer” as a reclaimed-or-not slur both ignores and reproduces this history. The most marginalized among us, as OP notes, need this language. The ones who have problems with it are, generally, among those who have language - or “community,” or social/economic/political support - of their own.