Warning! SPOILERS for Stranger Things season 4.
It's made fairly obvious in Stranger Things season 4 that Will has feelings for Mike and may be gay, but season 5 needs to do more about this aspect of Will's sexuality. While it's been shown since Stranger Things season 1 that Will has been bullied for most of his youth about his sexuality, the show hasn't taken the time to explore whether or not this is true until now. It's a great step for Will as a character, given that Will is frequently sidelined in Stranger Things. However, more needs to be done with Will and his feelings for Mike in season 5.
Following up on a mostly abandoned storyline from season 3 where Will seemed to feel left out by Mike and Lucas having girl troubles, Stranger Things season 4, volume 1 heavily hints that Will has feelings for Mike. This is confirmed by a conversation the two of them have in Stranger Things season 4, episode 8 «Papa.» Will extols Mike's virtues after Mike is being down on himself and feeling like he's not enough for Eleven. As he continues, he grows more and more specific and becomes increasingly emotional, until he can't look at Mike any longer and has to look out the window to hide his tears.
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Will Byers never explicitly comes out in Stranger Thingsas gay. It's clear he loves Mike, but it's not yet clear exactly how he identifies or what he wants. His confession is heartfelt and feels real, but it's made to a completely oblivious Mike, which robs it of some of its impact. It's also clear that Jonathan has an idea of what's going on with his little brother as the two have a conversation where Jonathan essentially lets him know that he wants to listen,
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