I explained it how it works. They are confused how can a word ban you from the game, no matter how offensive. Especially something like "f****t", which is something people would throw around on a daily basis(we have a literal, for all intents and purposes, analogue for this word). It feels like permabanning people out of...anywhere for something like "idiot", "bitch" or "bastard".
When I explain the logic that it's derogatory to gay people, who might get offended that their sexual orientation is used as an insult, they laugh at me.
There is nothing wrong with being offended. Especially when it hits some of your personal spots, whatever they are. You know, with all cultures presented in the playerbase, someone might get offended by something - Kai'Sa's cleavage, getting exploited by gambling, Graves' cigar. Someone might get offended when you talk in a language not commonly accepted on the server. Someone might get offended when he gets sitted and someone throws "report top" at him. Someone might get offended by insults, or "slurs"(fun fact - we don't have a proper translation for the word).
The issue is not someone getting offended with something, it's understandable. The wrong part is getting so offended by someone so alien and disconnected from you, that it's easier to imagine a character for your book out of nowhere, than imagining the person in question, that you can honestly say "gosh, this guy is so bad, he has to be isolated from us".
That truth is, people are more likely to report out of spite("he didn't give me blue, but I can hurt him through report") or out of principle("I am not offended at all, but these words are unacceptable in-game"). You can see it as judtice, I see it as the most broken and abused pinishment system in the world.