This is a holdover of gay hookup codes.

Basically every generation of queer folk back when being queer meant a legitimate threat to life (imprisonment, castration, torture or violence) or through precarity (being disowned, losing one’s job or benefits) queer folk lived like spies and used codes to quietly signal their status to others. There are some that have been easily lost to history but some would either be decoded and then become too dangerous to use openly… Or the straights would think it’s neat and adopt the fashion without realizing what it actually was being used for likewise making it too dangerous to openly use. So there’s these layers of abandoned code.

Modern codes are more complex and not as covert as folk have realized that a lot of straights wouldn’t know queer code if it came up and performed a drag routine on their nose. Like Pride events people wear flag colors that tell you what their deal is but straight folk only really tend to recognize maybe a handful. Others are less obvious, there’s a club color code of bandana that is very specific to kink and sexual orientation depending on what color and how you wear it.