There are two ideas being conflated here.

"directly causes things to happen" Implies some sort of hands-on second-by-second manipulation of events that could go any number of ways but god intervenes to make sure they go the way he wanted them to.

This is not the argument being made. It's far more fundamental than that. What I'm saying is the logical consequence of the very existance of any entity that knows with 100% certainty what will happen at any given moment is that choice is impossible. The omniscient entity doesn't need to intervene or "directly" cause anything. It doesn't matter. Everything is prewritten and no choice is possible. Everything everyone will do was never up for discussion. It may as well have already happened, much like the baseball game, given that the players have no ability to change the outcome.

What does disagreeing with something on moral grounds entail exactly? If something does no harm to anyone, what possible grounds are there to consider it "wrong"?

Alcoholism is a bad example because even if you don't hurt anyone around you (which is rare) you are hurting yourself, so on some level you could arguing that self-destructive behaviour is bad or wrong.

But being homosexual (which is not a choice anyway) doesn't hurt the person, or anyone around them, in any way.

The irrational aversions of people around them probably do cause harm as a consequence, but you can't be held responsible for other people's shortcomings.

Then why make this prototype? I suppose it might have been more expensive to make than they thought or something, but it seems a shame to waste all that work.