With the revival of Greek thought and custom that marked The Rennaissance also came the practice of pederasty, although the full picture is much more complex than just that. The understanding of sexuality was different then, as well as the understanding of masculinity and femininity.

Further, Florence, Milan, and several other city-states were rather progressive and accepting of much, even while the church was not. It was a time of great change and great acceptance. There were traveling foreigners, ideas and goods from faraway lands, many new customs and practices, constantly-emerging inventions and improvements, massive public works projects, and a whole mindset of growth and permissibility. Leonardo himself was a bit of an eccentric dresser and took great pride in his beautiful clothes; it was not a time of timid conservatism.

Also, people like Leonardo, Michelangelo, Botticelli, Raphael, etc were rockstars. The fact that they happened to have same-sex romances was not a scandal like it would be today (or, say, 50 years ago). People would hear that they had a new painting or sculpture completed, or anything else, and they would come from miles to look at it and be entertained, moved, etc. Punishing them for pursuing same-sex love would be counterproductive and massively unpopular. Although it did happen, just typically not to people with such stature and public admiration. Theater was popular, as was poetry and music, but for the visual arts the best artists were like the celebrities of their day.

So I guess a more concise answer would be that a) the sexual landscape was more complex and not as focused on the whole 1 man and 1 woman thing, b) many powerful Italian city-states weren’t bothered by same-sex relationships, and c) people like Leonardo had a bit of a free pass anyway due to their celebrity status. He used his political connections and clout to secure royal intervention for family members’ financial squabbles even.

https://retrospectjournal.com/2019/11/10/homosexuality-in-renaissance-florence-the-ambiguities-of-neoplatonic-thought/

https://oxfordre.com/politics/display/10.1093/acrefore/9780190228637.001.0001/acrefore-9780190228637-e-1245

I would like to add to this picture that this is not to say that homosexuality wasn’t criminalized. For example in Florence there was a police organization nicknamed “The Office of the Night” whose task it was to find those committing sodomy. However, it seems as though they mainly just issued small fines—many of which were never even collected. It is unclear what the exact climate was in Florence, but it was certainly more libertine than many other places in Europe.