The rules state positive representation (no stereotypes), not positive characters. The rules also clarify that having LGBTQ+ characters who are killers or villainous in other ways is perfectly acceptable. Many games and stories have presented LGBTQ+ characters as stereotypes rather than developing them as their own characters: this is what is not allowed for the jam.
This rule is not pushing any ideas onto anyone else, it is here to request that people submitting their work to the jam create and treat their LGBTQ+ characters with respect.