My dad acted in the Theatre and so I had been doing Theatre tech since about 11 years old (and have many, many beautiful women as friends). With that experience in mind I can verify you sister's friend's claim.
When you come right down to it there are two things you have to realize about women.
1. As hard as it is for Men to comprehend the truth is attractiveness isn't that high on a woman's list. It's not that women don't like an attractive man it's just lower on the list. Here's an example I use to explain it to men. I, as someone who dated a lot of theatre women, like dating professional dancers (for reasons I won't be so crass as to spell out here). But I'll certainly be interested in a beautiful, smart, funny woman who isn't a dancer. Attractiveness to women is like being a dancer to me. It's a plus but not a deal breaker. Hence "average looking bald guy" isn't necessarily a deterrent.
2. Attracting women in general boils down to one simple concept: Stand out from the crowd in a good way. No women wants a guy that seems average to her. So when your sister's gay friend shows a lack of interest in a woman every other man drools over it makes that woman wonder why and gives the guy a sense of mystery to him. Hence he stands out in an appealing way which makes women want to take a shot with him and see why he's different.