Queer, in particular, is a tough one. Obviously, smear the queer is an awful name for a game. And while queer has a century of being use pejoratively, it's also been adopted as a label by some lgbtq+ folks like myself (often as a way to be more politically forward than using the safer "LGBT" label).
You'll find that there really isn't consensus around the use of queer as an identity -- some in the community hate it, others love it. There's a lot to unpack in its history, and it's continuing to evolve every year.
Yeah. That term that should... probably not be used by folks outside the community, for the reasons you say. LGBT* is probably a safer and more inclusive alternative, so I don't see any real reason for folks outside the community to throw "queer" around. (Aside from perhaps discussions about the term itself, like this one)
That aside, the near-total reclamation of that slur by the LGBT community is such an interesting topic. I can't think of any other slurs that have been quite so fully reclaimed.
I would probably say that positive/neutral use of the term outweighs negative use like 10 to 1 at this point. Maybe 50 to 1.
You'll find that there really isn't consensus around the use of queer as an identity -- some in the community hate it, others love it. There's a lot to unpack in its history, and it's continuing to evolve every year.