Green’s Dictionary of Slang

fag-bait v.

(US gay) of a heterosexual male, to tease and harass a homosexual.

D. Rader Gov’t Inspected meat 43: [H]e had said (we used to travel into Chicago and check into the Turkish baths and let the faggots go down on us) that I enjoyed the game of fag-baiting too much and insinuated that I loved him in that way.
Meat 150: Has anyone ever bullied or suspected or fag-baited you? Not yet [Simes:DLSS].
[US]J. Pausacker Hide & Seek 242: Kosta’s got his hooks in, fag-baiting for spectator sport [Simes:DLSS].
[US]J. Butler Model/Escort 102: Harp was able [...] to quell a considerable amount of subtle fag-baiting in the student body.

In derivatives

fag-baiter (n.)

(US gay) one who harasses and teases homosexual males.

G. Vidal 2nd Amer. Revolution 178: [T]he mischievous effect that Epstein’s piece might have on those fag-baiters who read it.
[US]T. Fennelly Glory Hole Murders 121: Eddis was the dirtiest fag baiter on the New Orleans vice squad [Simes:DLSS].
[US]E. Sedgwick Epistemology of the Closet 245: [A]ll of the fag - baiters I read about seem to have personal reasons for their attacks.
[UK]D. Jarman Smiling in Slow Motion: Kournals 1991-94 [ebook] She could hardly be termed a fag hag - that unpleasant epithet from the strangled past – but she could be called a fag baiter , a Russian matador who circled round you and stuck in skewers.
[US]N. Aldyne Vermilion ‘ [ebook] [T]hey were fag-baiters, and they beat him up, and killed him’.
fag-baiting (n.)

(US gay) verbal or physical harassment or victimization of a homosexual man or men.

P. Krassner (ed.) The Realist vols. 84-938/1: [W]ondering how to get out of the place [...] and still not bring down derision upon me from all the potbellied fag-baiting barflies.
[US]T.L. Becker Political Trials 166: One reporter calleed Foran’s cross-examination of Ginsberg a form of fag baiting.
[US]L. Goldstein Male Body 192: Fag-baiting may have been one of the normal ways to attack a potential enemy and solicit audience approval at the same time.
[US]S. Fairman-Silva Courage to Connect 123: Young people fearing fag baiting were reluctant to wear Provincetown sweatshirts.