People don't like to stare down the barrel of their own prejudice, especially when it's towards someone as close as a family member. Homophobia is sadly still so embedded culturally that it tears apart countless families and causes people to disown their own blood.
One of the most toxic forms of homophobia, aside from fully pushing an LGBTQIA member out of the family, is forcing them to stay silent about the way they've been treated. In many families that make amends after a falling out, there is an oppressive understanding that the LGBTQIA loved one is supposed to sweep past homophobia under the rug and undermine the complexities of their identity in order to make other people more comfortable.
It wasn't until his father passed away that OP's mother had a change of heart and reached back out to mend the relationship. Since OP's nephew was 5-years-old during the falling out, that makes him 16 now, and reasonably curious about why his uncle was distant.