I can agree with hitch's "
incredibly frustrating", even if we agree on little else in this thread.
Others in this thread have explained very well why the segregation in Borders is harmful to African-American authors, and that its effect is racist. I trust that's clear?
So the topic people are confused about is whether categorization in online shops is racist or homophobic, or not.
I took a look at Amazon, and the first book it recommended for me in the LGBT category was a historical Scottish werewolf romance. I went over to romance, drilled down to Scottish historicals, found 400 pages of results, entered "werewolf" in the search field, and found the gay Scottish werewolf romance on the second page of results. So it seems that LGBT romances can be found both if you browse in Romance and in LGBT, and the categorization doesn't hide them from people who browse in Romance. Thus, I feel confident to say that this categorization isn't homophobic.
I assume it's the same for Netflix. The Norwegian Netflix doesn't have the LGBT cateogory, but I can find "Kongens nei" in both Norwegian films and historical films.
To sum up: If you can find a book (or whatever) by or about about a minority in all the most important categories where you'll find its majority counterparts, and also find it in categories specific to that minority, it's not discrimination to add the minority categories.
Frankly, I don't see how this is difficult.
There may be edge cases where this is difficult to determine. If a book only gets very few categories, it may be better to remove a moderately popular mainstream category to add one specific to the minority. If a book gets "historical romance", and then has to choose between "Scottish", "werewolf", and "gay", it might be better seen, and get more sales, if the category chosen is "gay", not one of the others.
And, of course, we might ask whether the lack of an LGBT category in Norwegian Netflix is harmful. Maybe it is?
Human society is complicated, it's not difficult to find situations where things aren't clear cut, and where no choice will be perfect. But just because some situations are difficult doesn't mean that all are.

(I wish the offtopic icon didn't look so angry

)
By the way, there may be homophobia or racism in how search results are weighted, and in which films/books are shown in "Recommended for you" lists. These are typically made by machine learning, ie. algorithms which analyse people's behaviour and adjust to them. Even if the intent of these algorithms is to maximise sales, the result can be unfair -- that's an interesting field, but probably outside the scope of this discussion.
(And now I'm off to buy that
gay historical Scottish werewolf romance, I've read and liked something else by that author, and it looks interesting!)