I can't help but feel the better response would have been for the people who didnt like it to just release their own mod that replaces all the flags with pride flags instead 
Yeah, but I bet you that also could have backfired if instead became a huge flame war in between the site community (not that I know if it already is a flame war). This stuff escalated when is two groups of annoying assholes.
Like the OK sing bitching, people over reacted to something but there is actual malice and gaslighting at the other side that made difficult just ignore.
Dunno how Nexus operates and how is the user culture there, so I cannot say what is the solution to this, specifically since seems it is getting traction.
I don't see how it doesn't escalate things like the era-banned-troll I just requoted was saying; its the same deal with the star wars FINALLY THE EMPIRE ACKNOWLEDGES THE GLASS CEILING! shit I posted above.
Ignoring it
will make it go away. As soon as you start banning for badthink, you just create a new fucking battleground for TEAM BLU and TEAM RED to start all over again.
If someone wants to play Spidersman without pride flags, honestly,
who actually fucking cares? What actual harm is it doing to someone?
Even if they're a streamer repeatedly going "LOOK, NO GAY FLAGS IN MY SPIDERSMAN GAMES! TAKE THAT college intellectual CUCKS!" what is the actual real world effect of this? Other sad people also install that mod?
Making a big song and dance about banning, then racing to the gaming press to go "LOOK! EVIL HAS BEEN DEFEATED" just amplifies this stupid fucking bullshit and its not 'the nexus community' who are arguing about it anymore, its all the other fucking culture warriors descending in to fight another fucking proxy war on another fucking proxy battlefield and shitting up another fucking part of a hobby most people don't want this stupid fucking bullshit continuously being dragged into.