Well, in my opinion:
I've witnessed multiple people saying "fag" "nigga" "shut the fk up" (How can I not

)
And well, I allow everyone say whatever they want as long as both of the players, the insulter and the one directed to are okay with it.
And I certainly won't allow brainwashed people bring racism on the server and actually say "nigga" to someone and are meaning to make it offensive.
It's quite simple actually,
If it's a RP scenario I don't think anyone should get offended by anything said. But if a player is not okay with taking insults, I, as an admin have to respect that and make the one insulting STOP that in case that the one insulting isn't reasonable enough to stop when he's told to.
Hope I made it clear enough.