if you have a bad username will you get a permaban?

Generally, no. They'll usually just change your name, and force you to pick a new one. Though I think if they do that and you repeatedly replace an offensive name with another, they might start to escalate punishments, but I don't think that happens often.

If it isn't racist but gets reported enough they'll get you to change it. That's about it I think.

I doubt it, most likely if you got reported for it they may make you change the name...I should say if it were an offensive user name because my name is bad haha.

Of course there may always be extenuating circumstances...why do ask if you don't mind sharing ?

I think for a first offence they'll change it, after that it might be a permaban. I remember one person who had the name "Isis ganked Paris" and he got banned.