This is all very interesting, and I had not thought about it. I had thought that her relationship with Valerie Kirk was designed to show that the she was more complex than her "predecessor", Leslie Williams.
Both women are, as I have said before, seductive yet poisonous. However, Leslie Williams has "no redeeming virtures", whereas Kay Freestone is capable of being a real friend and helping someone in trouble.
Whereas Leslie's husband was a decent fellow who was just defending himself in threatening to throw Leslie out, Mark McAndrews sort of "had it coming" (I love his quote "Kay, all we owe each other is a little affection!"). I didn't think of their relationship as allusions to homosexuality. However, now that I recall the episode "The Conspirators" where there is quite open allusions to homosexuality between Joe Devlin and his young friend, Kerry Malone, this theory seems plausible.
Good points YM.....And with The Conspirators you throw in another set of lovers....possibly...I think both episodes were dealing with that same issue...It was the last season, and maybe they wanted to see the feathers fly!!!..............Will we ever know???