I'm reading Abbas Amanat's excellent work "Iran: A Modern History", which covers Iranian history from 1501 all the way to the modern era.
Ismail II had a very short reign of 15 months that was characterized by radical shifts in policy. He was found dead in November of 1577 with his lover, "a young man of humble origins, after a night of nocturnal wandering through the taverns in the capital." (Amanat). Supposedly, he died from opium overdose, but assassination was also a strong possibility due to his alienation of the Qizilbash chiefs.
Does this mean that Ismail was homosexual or bisexual? It's not explicitly stated, but it would seem to be strongly implied.
Moreover, how would homosexuality be viewed in this strict religious Shi'a Islam society? I assume it was officially condemned, but would people "look the other way", so to speak, when someone of noble origin was homosexual? Would've this type of thing been the subject of court gossip? Would someone have gone out of their way to keep this "top secret"?
I can't speak to the specific example of the Safavids, but you may be interested in reading a previous answer of mine addressing attitudes toward same-sex male relationships in the Ottoman Empire, as the cultural assumptions underlying them would have been fairly similar.