OOH! By all means, don't expose this content in a world where that word is splashed about like bathwater!
I absolutely hate the fact that people are so paranoid for their kids. It makes me sick that they have no exposure to the real world, yet when they do get it, it hits them like a breezeblock of pain!
Anywhoo, back on topic:
This is a ridiculous subject. The player trained the NPC to say that word through some way, either typing in the word to teach, or making his name the word.
The game didn't include that word in it's programmed list of goodies, the player decided to put it in, and post a picture of it, just to start a commotion.
I don't even think there's a discussion here. Good day!
EDIT: And if you look closely, it has the sproingy thing~~~~~~~ over the N. So quit whining and being butthurt.