Does the works of non-heterosexuals belong to fourth world literature?

No. "Fourth World" is an essentially meaningless term that people with an agenda or an axe to grind like to use to imply "poor us (or some group we sympathize with), we're not even ThirdWorld; give us your money/pity/attention instead of them. "

And ... just to be clear here: "non-heterosexuals" includes people like Isaac newton (there's no real evidence that Newton was gay, but there's also no evidence he ever had sex at all, so "non-heterosexual" seems to fit) and quite a few of the ancient Greeks. Newton was a citizen of quite possibly the mightiest empire on the planet in his time, and the Greeks were the shining light of civilization in theirs; classifying them as anything other than "First World" would be ludicrous.