The only way I know that kids can get out of PE around here in middle and high school is by getting a "waiver". To qualify for a waiver, the student has to be on a competitive level sports team with practice of at least 10 hours per week.
In high school if your kids are on a sports team or in our district, marching band, these also qualify for PE credit. Here, we need two years of PE to graduate. So, for example, if you play a spring sport every year, second semester, it would count as 2 total years (4 semesters).
We had to take it in Jr High, I didn't notice any issues with bullying or humiliation in gym.