My nephew and niece (fraternal twins) are age 6. They were talking about their aunt's male friend who was wearing a bra and acting girly. They told me that he was gay. I asked them why they would say that, since "a guy who dresses in female attire and acts girly can still like girls". That was my way of saying that gender expression doesn't dictate sexual orientation and vice-versa. They said "ok". I know that my explanation runs the risk of misgendering their aunt's friend, as the friend could actually be trans female. But I didn't want to go any further and make things more complex. Thanks to FB stalking, I found out he's male, so he's probably cisgender... Then they said that their dad (my bro-in-law) told them that you can go to jail for being gay in the U.S. My jaw dropped. Like... I know Vietnamese people are socially conservative, but when they spread lies to shelter kids and warrant hate against people in the LGBT community, that's just wrong, IMO. Do you think I crossed the line by correcting them about gender expression ≠ sexual orientation, as I'm not their parent? I'm their uncle, so it's not my onus to teach them everything. That's their parents' prerogative. However, I cannot just sit there and let them become the next generation of bigots.
You should definitely let them know that being gay isn't illegal. You should also explain that gay people aren't bad or evil. But I also think its wise not to come out to that side of your family yet. Since their father seems very homophobic its very likely he won't let you hang around them if he knew you were gay. And if you couldn't hang around them, you couldn't influence them to be tolerant.
If I talk about morality, then they may tell their parents, who will then question my sexuality. Being pro-LGBT in a socially conservative environment like this is grounds for being queer. That's why I chose not to discuss the morality of homosexuality. Since she and her husband are buying me a laptop for ~$400, she expects me to partially support the twins' college tuition. That fair trade-off tho. This is after I graduate from pharmacy school. Why would I financially support people who will likely grow up to be against queer people? Regardless, I'd likely do it so that they'll leave me alone.