The film features significant LGBTQ+ presence, including a central transgender character, Timmy, and other queer characters like Tinker Bell. However, their identities are primarily linked to predation, addiction, and manipulation within a grim and unsettling narrative. While the film aims to comment on societal fears, the direct portrayal of LGBTQ+ characters is largely negative, associating their identities with vulnerability and misery.

The film *Peter Pan's Neverland Nightmare* includes a trans character, Tinker Bell, whose identity is depicted negatively. Her trans identity is intertwined with heroin addiction, psychological trauma, and a dark horror context, lacking any affirming themes. This portrayal links trans identity to misery and problematic stereotypes. For example, Tinker Bell's character arc is defined by her trans identity being connected to addiction and trauma.