You’re right about the fact that queer is reclaimed (goes back as long as to the 1990’s with my own my generation, which unfortunately is not young anymore), but nevertheless it is mainly used as a term to describe identities, rather than sexualities. It is also used as an umbrella term as you say.
That doesn’t necessarily mean that it automatically is the correct or most accurate term to use, to describe everything in the, so called “umbrella”. Far from everyone in the LGBTQ+ community believes it represents them. A large number would never use it to describe their sexuality, since it doesn’t really say anything about that.

It is quite common that people describe themselves as “queer” and live in opposite-sex relationships, where their sexuality follows the heterosexual norm, whereas other parts of their lifestyle don’t conform to the same. The latter could perhaps be defined as “queer” and fit in one of the “letter-categories” on the queer spectra.

However, in this case with “Young Royals” the story focuses on the love story between two teenage boys, who are coming to terms with their sexuality. It is the relationship between two male characters, which forms the LGBTQ+-theme of the movie. No other characters. That’s the reason why I agree with the writer of the first comment above and believe it would be more accurate to use the word “gay” to describe the love-theme (or main story) in this case.

Queer has been reclaimed by the younger generation and is no longer, as you say, “awful or abusive.” It’s largely an umbrella term for the LGBTQ+ community.