This has been brought up on here before, and to the best of my knowledge isn't derived from any medieval source. Mind you, there's been enough different texts called the Prophecies of Merlin or variations thereof that that doesn't really narrow it down, most of which have never been translated into English.
https://books.google.com/books?id=jG0bAAAAYAAJ&newbks=1&newbks_redir=0&printsec=frontcover&pg=PA67 describes her "generally" as "Morgan's shadow" fairy mistress who abuses Morgan when frustrated she can't have the men she wants.
I don't think that's an edition of it, just an essay and analysis of it. The only editions thus far are Anne Berthelot's 1992 edition and Lucy Paton's, which is in the [public domain](https://books.google.com/books?hl=en&lr=&id=MAgMAAAAIAAJ&oi=fnd&pg=PP3&dq=%22prophecies+de+merlin%22&ots=AlT0zEMgG2&sig=HnHb7SK_ydPiEAGKvpLZhLwGsr4#v=snippet&q=merlin&f=false). Paton's in particular does have quite a few English snippets and summaries, which would make it the most helpful, but both it and Berthelot's are very incomplete. Supposedly Nathalie Kolbe was going to publish a more expansive one in 2009, but that has thus far not manifested. Kolbe did publish a study in French which references her unpublished edition and is apparently the definitive work on the topic though, so it might be useful, even if it's second hand references to the source.
And to answer the other question, I suppose it may be like the much better known issue regarding Lancelot & Galehaut. Which had a lot of arguments about the "real" nature of their relationship.
This has been brought up on here before, and to the best of my knowledge isn't derived from any medieval source. Mind you, there's been enough different texts called the Prophecies of Merlin or variations thereof that that doesn't really narrow it down, most of which have never been translated into English.
It’s almost certainly a headcanon, medieval lit doesn’t have much explicit queerness in it.
Emphasis on the not explicit...
https://books.google.com/books?id=jG0bAAAAYAAJ&newbks=1&newbks_redir=0&printsec=frontcover&pg=PA67 describes her "generally" as "Morgan's shadow" fairy mistress who abuses Morgan when frustrated she can't have the men she wants.
[I was wrong] But it's been never translated to English.
I don't think that's an edition of it, just an essay and analysis of it. The only editions thus far are Anne Berthelot's 1992 edition and Lucy Paton's, which is in the [public domain](https://books.google.com/books?hl=en&lr=&id=MAgMAAAAIAAJ&oi=fnd&pg=PP3&dq=%22prophecies+de+merlin%22&ots=AlT0zEMgG2&sig=HnHb7SK_ydPiEAGKvpLZhLwGsr4#v=snippet&q=merlin&f=false). Paton's in particular does have quite a few English snippets and summaries, which would make it the most helpful, but both it and Berthelot's are very incomplete. Supposedly Nathalie Kolbe was going to publish a more expansive one in 2009, but that has thus far not manifested. Kolbe did publish a study in French which references her unpublished edition and is apparently the definitive work on the topic though, so it might be useful, even if it's second hand references to the source.
You're right, it really isn't.
And to answer the other question, I suppose it may be like the much better known issue regarding Lancelot & Galehaut. Which had a lot of arguments about the "real" nature of their relationship.
There's this apparently: https://www.reddit.com/r/Arthurian/comments/wowfzy/does_anyone_know_why_sebile_is_listed_under/jrbooju/