The hand gesture that Otonashi does when he asks this actually means/indicates 'gay' - sort of the Japanese equivalent of doing the limp-wrist thing.
Cue Otonashi asking 'Are you.' with a troubled look and an Aside Glance, and Hinata hurriedly cutting him off. At one point, Lubbock snaps and yells, 'What is wrong with you!? Are you gay!?' Tatsumi denies it. Tatsumi is really shy and averts his eyes whenever they do this. Lubbock is jealous of Tatsumi because all the girls fall for him and tease him with their bodies while they won't give Lubbock the time of day. All of a sudden some Yaoi Fangirls started squealing and having a fit.