Yes, I can't see the 'modernness' of 'modern love' referring to sexual orientation, since I'm sure Bowie would have considered orientations to be ancient; rather, it refers to new sexual practices (… of the '60s and '70s).

In reply to:

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Bowie at 36 suddenly wanted to make a shitload of money, to be a celebrity, to be well accepted by the mainstream. Something about the way he'd done things for the previous five years - years we fans consider a creative zenith for him - dissatisfied him.

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I've always read the song's opening lines—'[Knowing] when to stay in, get things done'—as a declaration of a new work ethic, one which involved adapting his creative resources/persona into a new direction for the '80s.