There are plenty of people still uncomfortable with queer being reclaimed as a word given its previous (and sadly still current) use as a slur.
A bit off topic perhaps, but I'm actually one of those people. I fully respect those that want to refer to themselves as queer but personally I don't feel comfortable being called a slur I was bullied with all throughout my childhood and into young adulthood. I didn't reclaim it myself. Each time in my life, even when I've just been casually with no malicious intent been called queer, it has made me tense up. I don't like that word. To me it holds the same negative connotations as the F slur for gay people. In general, I'm just not into labels for myself full stop, even if I can understand how they help others find a place.
The phrase "serving c*nt" actually originated from American Ballroom culture which started back in the 70s. It was a term used to describe competitors, some that were trans who were incredibly feminine and
passing (perceived as their identified gender.) That trickled into RuPaul Drag Race culture, and is how the slang phrase has been going around a lot today.
People can make art and use whatever words they want. There's a time and a place for everything though. It's just naivety to think the repeated phrase of "serving c*nt" would make it to Eurovision, even if one claims it's being used in a positive sense in the song.. in fact, to do that even implies, that yes, she's indeed swearing which to my recollection breaks one of Eurovision's own rules.