A famous drag queen is denying stealing a massive amount of cash from a guest who claims the performer straight-up jacked her in plain sight ... a moment that was captured on video.

Bryan Watkins -- who currently performs as 'Shannel' for the 'Drag Brunch' show in Vegas -- was accused of lifting somewhere between $500 and $700 from the purse of a woman named Meggy during a performance last weekend. Video from the event appears to show Bryan taking money, although it's unclear how much.

Bryan -- who competed on season 1 of "RuPaul's Drag Race" -- says he absolutely did NOT take the large amount Meggy is claiming.

Now, as for the actual accusation here -- Meggy outlined it pretty clearly in a viral TikTok video ... saying Bryan was going around the room for some sort of purse gag, and eventually came to hers -- which had $1,300 in there for her birthday blowout.

Meggy claims Bryan rifled through her bag and plucked a significant wad of cash -- and that when she confronted him about it ... he kicked her out of the show, without returning any of the cash.

Bryan admits to taking some loot, but says it was only a couple bucks as a gag, not hundreds like Meggy claimed. He says the venue's management refunded the woman's tickets and even offered to pay her $700 as a good-faith apology ... but that wasn't enough.

Meggy claims to have gone to the cops over the alleged theft ... but a spokesperson for the Las Vegas Metro Police Department tells us they don't have a record of the incident.