I'm probably the only one thinking this, but I think Milo may have been the one who outed Nelson. I'm just saying, if Jame wanted to out Nelson, he could have done it the first day back from school. I know I know, people think Milo loves Nelson. But Milo is a super closeted kid, he wouldn't want anyone to know about him being out. So he probably made up the story that Nelson got him drunk and made a move on him and that's why he had to go back to Stratford in the first place (whether or not he cares about Nels). And thinking it out from Milo's point of view, he probably thinks Nelson can handle the situation because he's always saying about how everything will be okay and he still have a family who will support him no matter what. This is just a theory, but its what I can assess from Jame. Or it could be Thompson Trust.
Also love that Brandon finally came out to Nelson, I think everyone knew something was going on. But why was he always trying to get Nelson trashed, kind of made me nervous he was going to date rape Nelson. lol