Been there and seen it. But usually kinda "localized" in the packed crowds, not like they're doing the full Monty on a parade float. The official Crews would never allow that.
A few drunken guys will briefly flash from the wrought-iron balconies above, more typically their asses than their balls. Cops will break it up if they catch it, but I never saw any citations issued.
More common is tits flashing, to earn beads thrown from the floats. That's so accepted that it hardly gets attention from anyone, including the cops, unless a woman totally removes her top and starts getting raunchy.
And you're mistaken if you think there isn't a strong gay presence at NO Mardi Gras. Whole balconies are taken over by screaming gay men, waving boas and rainbow flags, and they circulate throughout the crowds in outlandish costumes.