What do you do? Everyone agrees it's a complicated thing. I think if it were my kid it would depend. Do the kid and the grand kids see each other all the time or is this a just holidays sort of arrangement?
If it's JUST Christmas dinner I would let homosexual son bring friend to dinner with the explicit instructions that they act like two platonic friends in front of my grandchildren. No hugging, handholding, kissing, sitting to close on the couch etc.
If they all live nearby the grand kids probably already know he's gay and maybe he and his friend should make other arrangements for dinner.
I think your answer is appropriate.
Further, I would always welcome my child, at a minimum, as an opportunity to demonstrate love, encourage a proper lifestyle, and provide support and guidance to lead a better life.
Now, there would have to be rules. For example, a child struggling with addiction is welcome, just no using immediately before, or during the event. And like you said, keep your hands to yourself.
I think your answer is a reasonable one. They seem to be embracing homosexuality in some of the local Churches. I don’t ever hear any criticism of it as a lifestyle, just the opposite.
Jesus ministered to those considered most sinful, but He told them “sin no more”.