As in the old-fashioned definition meaning "happy" obviously. And the term "gay blade" in olden times meant a dashing young man. This is not the case here, but instead resorts to homosexual jokes. Which is ironic because the original Zorro was a rich womanizer who was a secret revolutionary hero. (No, he did not exist in real life.)
So, what does homosexuality have to do with this? The original Zorro has since passed his mantle to one of his sons, only for him to get injured, so he is forced to have his gay twin brother Bunny Wigglesworth, a British naval officer, take his place. That is evidently the movie's big gimmick, which is not really funny. There are some other jokes, both about homosexuality and otherwise, but few of them work, and the constantly-bellowing villain doesn't help. Though the costumes and action scenes are good, as a parody this is hardly laugh-inducing. Best to find a straight (pun intended) Zorro movie instead.
So, what does homosexuality have to do with this? The original Zorro has since passed his mantle to one of his sons, only for him to get injured, so he is forced to have his gay twin brother Bunny Wigglesworth, a British naval officer, take his place. That is evidently the movie's big gimmick, which is not really funny. There are some other jokes, both about homosexuality and otherwise, but few of them work, and the constantly-bellowing villain doesn't help. Though the costumes and action scenes are good, as a parody this is hardly laugh-inducing. Best to find a straight (pun intended) Zorro movie instead.