I always interpreted the “don’t be gay” Bible thing to mean “if you’re not gay, don’t pretend to be” kinda thing. So I’ve always thought what the Bible says is wrong is to not accept your sexuality & try to change it.
Probably says something else too, I’ve been seeing interpretations based on the Hebrew texts, and, unsurprisingly, the versions people know tend to get it wrong & just use the text to reinforce preexisting beliefs.
I grew up an Orthodox Jew (I’m not as an adult). The way I learned it was that existing as a gay person, as in, that’s simply who you are, isn’t problematic. The issue is the act of gay sex itself, which is what the verse in the Torah refers to.
That is to say, your understanding is correct.
Disclaimer: I don’t care about it myself. Just explaining it how I was taught in Orthodox schools.
It was the same for us lutherans here in northern europe, it was the act itself that used to be disallowed. They've since allowed practicing gay and lesbian priests though.