Something that caused a bit of a ripple when it occurred in the season 3 premiere was Betty’s dropping the word “lesbian” in relation to little Sally. She tells Don when he returns from his adventure in Baltimore that Sally ‘has taken to his tools like a little lesbian’.

Was the use of this word at all common in those days? Well, taking into account Betty’s background at Bryn Mawr, one of the Seven Sisters rather known for its lesbian proclivities, she probably has some experience knowing lesbians. From this, her rather un-demure comment to Don comes from this background: Betty feels she has the authority to say this, whereas Don doesn’t know as much about it. If you notice, in these areas, Betty grows more decisive and stronger in voice, in this instance and a few others (when she orders food, for example). 
As for the use of the word, it isn’t at all unbelievable that it would be flying around at this point.

From commenter Luna in this post:

“Between 1955 and 1969 over 2,000 books were published using lesbianism as a topic, and they were sold in corner drugstores, train stations, bus stops, and newsstands all over the U.S. and Canada. However Most were written by, and almost all were marketed to heterosexual men. Coded words and images were used on the covers. Instead of “lesbian”, terms such as “strange”, “twilight”, “queer”, and “third sex”, were used in the titles, and cover art was invariably salacious.”

Apparently “lezzie” was also the preferred insult, so perhaps Betty was being kind by using the full word?

• footnote - by Natasha Simons

It has been said before of Joan, but she does seem to have some uncanny Holly Golightly traits. Particularly, with her choice of roommates.

How could have a savyy lil sex kitten like Joan have not seen this coming?

Remember when she kissed Sal at the election party and that dumbfounded look came across her face? We get the sense that Joan’s gaydar is very keen. So how did she not notice that her roomie was a big old Lezzie? The night of the big confession, Joan smiled it off and even brought men back to their apartment!

Perhaps Joan was doing what Lightly did which was to make sure there was no missed opportunity. Joan, well intentioned but sometimes clumsily, believes that she can teach girls in her life how to get the most from men.  Even if Carol chose to be a lesbian, surely, that didn’t mean that she should live in poverty as a spinster. According to Truman Capote, who wrote Breakfast at Tiffany’s some of the best kept women in New York were actually lesbians.

From a 1968 Playboy interview:

Playboy: Holly Golightly alludes to her onetime Lesbian roommate and obliquely expresses a sexual interest in other women. Was Holly a Lesbian?

Capote: Let’s leave Holly out of it. It’s a well-known fact that most prostitutes are Lesbians—at least 80 percent of them, in any case. And so are a great many of the models and showgirls in New York; just off the top of my head, I can think of three top professional models who are Lesbians. Of course, there’s a Lesbian component in every woman, but what intrigues me is the heterosexual male’s fascination with Lesbians. I find it extraordinary that so many men I know consider Lesbian women exciting and attractive; among their most treasured erotic dreams is the idea of going to bed with two Lesbians.

So while Joan doesn’t seem to have an enlightened view of homosexuality, she does seem to have only the best intentions for Carol. But like, Golightly, Joan, of course, abandons her roommate to find her own sort of happiness. Though, Joan’s vision of contentment more domestic than Holly’s it’s still equally as elusive.