This essay examines the 2024–25 Haitang Incidents, a crackdown on danmei (‘boys’ love’) authors producing online male-male erotica, and argues that these events marked a shift from heteronormative ideological policing to predatory state brokerage. Challenging optimistic narratives of queer resistance, it introduces the notion of ‘ugly beauty’ to analyse danmei’s ecological rupture. It traces how revenue-driven ‘oceangoing fishing’ law enforcement, platform capitalism, and political depression fracture the community, while also sustaining danmei as a fragile but resilient survival strategy in post-Covid China.