I am only familiar with "faggot" being used as a slur for a gay man or as a bundle of sticks.
Some statements in the preceding paragraphs that provide context:
...A predawn hush had come over the desert basin. Straight overhead, the stars were a sequin shawl flung over blue-black...
...As the Duke watched, the moon dipped beneath the Shield Wall cliffs, frosting them, and in the sudden intensity of darkness...
And the passage itself:
To the east, the night grew a faggot of luminous gray, then seashell opalescensce that dimmed the stars.
The preceding paragraphs suggest to me that "faggot" is describing a color. As an allusion to a burning bundle of sticks I would have expected him to say orange or red. Instead he says "luminous gray".
This book was written 50 years ago so I'm wondering if it had another meaning back then.