Great question and one I’ve wondered about as the parent of an lgbtq child applying to schools where lgbtq students are probably over represented (relative to the general population). My assumption has been that it is not a decisive admissions factor or anything approximating a hook but that being lgbtq–or more precisely, speaking thoughtfully in an essay about lgbtq identity–might marginally help make a case about “fit.”
I will note that Amherst asks directly whether applicants identify as lgbtq and specifically what they identify as (e.g., cis gay man). My kid was surprised by the specificity and directness of the question but was happy to answer. No idea how they use that information.