Peters visited Stonewall on Saturday and Sunday night, and was reportedly asked to leave both times due to excessive intoxication. He was apprehended by police late on Monday afternoon.
Peters was convicted of killing and dismembering the bodies of two men he was involved with, Tereaupii Akai and Bevan Frost, months apart in 2001. Police warn he should not be approached.
This year, the symbol of the LGBTI community will fly from four times as many Sydney town halls as 2014.