I may make fun of Fitz all the time for being so painfully oblivious to the exact nature of his relationship with the Fool, but in all seriousness it is a very realistic portrayal of an abused and abandoned child who never got the tools to process it. There were so many formative events that all stacked on top of each other: his mother leaving him, his father choosing to never even meet him, Chade bluntly informing him that his grandfather is allowing him to live because he will be a useful tool for the royal family, Burrich threatening to cut him off because he has the Wit, being abused by Regal and Galen and all of the adults who he trusts looking the other way because it’s more convenient for them to pretend they don’t notice (except for Burrich, but he has no power to stop it.) Even when he’s nearly killed, he tries to turn to Verity, Shrewd, and Chade, and they all shrug their shoulders and say Regal got a talking to and they’re sure he learned his lesson (6 years later, he has Fitz tortured to death.)
All of this led to a Fitz who struggles with attachment, is extremely distrustful of the people he’s close with, and who doesn’t believe he deserves love. Whenever someone does get close, he subtly pushes them away out of fear. He assumes that Chade wouldn’t even do something as simple as help his foster son get an apprenticeship without bargaining for it. He lets Burrich and Molly believe that he’s dead, despite this meaning he can’t meet his own daughter. He won’t even reach out to Patience, the closest thing he had to a mother. He of course makes up excuses about how this is for the best but really I think it’s because he’s afraid to face them. He believes that they wouldn’t want him, or that he would just cause trouble for them, or that he failed them. He prefers to keep things surface level and transactional, like with Starling or Jinna, because it doesn’t involve being emotionally vulnerable and the rejection and abandonment that he fears will inevitably come with that.
That brings us to the Fool. He is the only person Fitz ever believes truly knew him (Nighteyes did too of course but he’s not a person, which is why I think it was easier for Fitz to accept their bond.) The Skill wrist was both an obvious sexual metaphor and a reflection of the kind of love the the Fool offered him: unconditional, unlimited, with total honesty and sincerity. This scares the hell out of Fitz. He doesn’t think it’s possible to have that kind of emotional intimacy with someone and have that person still love him. I think that is what really bothers Fitz, and why he tries to nuke their relationship (well that and finding out that Amber existed and Beloved had this whole other persona who he didn’t know triggered some major trust and abandonment issues.) The homophobia is just an excuse that he makes to himself to not have to examine his feelings any further. Tragically, after the Fools death and resurrection, he seems to come to terms with things and be open to that kind of love and the vulnerability that comes with it; but at that point the Fool rejects him and leaves. This is pretty much the most painful thing he could have done given Fitz’s history, and it it weighs on them until the very end.
tl;dr the real thing keeping Fitz and Beloved apart is Fitz’s fear of accepting love