Butch is one end of a spectrum with femme on the other end. It can be used insultingly, but it’s not anti-gay. If anything it’s extremely gay.
It might be slightly sexist to throw at someone unprompted, but I think it’s pretty fine in this context. It’s not like she’s using it on a trans woman. She’s biting back at another cis woman who attacked her appearance by telling her she looks masculine, showing she can go low too, and is a better at it. She even alliterates literally 6 words in a row during a coherent insult. MTG couldn’t do that if she had all week.