Honestly with how repressed the dude is, struggling with his own sexuality kinda makes sense. Especially since he's one of only four npcs to have an actual depicted/former romantic relationship besides you. Weirdly enough, all of those are straight. Bit strange with how much more focus this has on m/m relationships.
I'm trying to think of a fourth person, but I can't who is the fourth? I know Logan is one and the others I can think of are Harold and Roushk, who is the fourth? also, yeah, his reaction does seem the most sensible since he always thought he was straight, anyone suddenly having a sexual awakening is going to deny it/repress it if they were in a straight relationship for long enough TO LITERALLY GET MARRIED it would be difficult to suddenly accept it.