'Nother gay person chiming in. Haven't played DQXI, but it sounds like Sylvando is positive representation.
Effeminate men — regardless of sexuality — are no less deserving of representation than masculine men, or men who aren't particularly masculine or feminine. It's true that effeminate portrayals can become problematic if they're the only form of representation, such that it contributes to the stereotype that all gay men are effeminate. But that's more indicative of wider societal ignorance than a problem with a specific character like Sylvando. Unfortunately, in my experience, Japanese games do cling to stereotypes when it comes to LGBT+ folks more than their Western counterparts these days.
The biggest problems with LGBT+ portrayals in gaming is them (1) still being relatively uncommon, (2) almost always being singular characters, never showing healthy relationships, and (3) being phobic, either treating LGBT+ people with contempt or mockery, or propagating the idea that they're predatory (looking at you, the ever popular yet disgusting Persona 5).
Keeping in mind I haven't played the game, if there seems to be anything less-than-perfect about Sylvando, it's that he's yet another singular gay character, contributing to the dearth of gay relationship portrayals. (But not all characters need to be in relationships, so again, more indicative of a wider problem than with that character.)