Some folks have interpreted Solo's response in that episode differently and more positvely.
Personally, I think that one is so obviously a joke, I wouldn't take it as a serious overture and neither does Solo.
As I said in another comment, I don't think I've read a story in which Solo was the gay or bi one and Illya was completely straight. I think if that scenario were the case, I really don't think Illya would come around as Solo usually does in stories when the scenario is reversed or when they are or both bi/gay. Often, when they are both straight but somehow find each other, Illya is receptive.
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Personally, I think that one is so obviously a joke, I wouldn't take it as a serious overture and neither does Solo.
As I said in another comment, I don't think I've read a story in which Solo was the gay or bi one and Illya was completely straight. I think if that scenario were the case, I really don't think Illya would come around as Solo usually does in stories when the scenario is reversed or when they are or both bi/gay. Often, when they are both straight but somehow find each other, Illya is receptive.
IMO, Solo will go as far as Illya allows.