[matt_st3 (Strongrule)]

It's always the intent or meaning behind the word. The word or rather the literal vibration in your ear (or visual letter arrangement for the eye) is not inherently offensive, but rather the meaning behind it. In public it will take on the public context to an outside reader, which with racial slurs or phrasing will take on the public meaning; offensive. The outside viewers that are personally affected by the words, through their own experiences, will be more so affected. Between the friends it holds no offensive value against the receiver, or at least that would be the ideal intention. It's all a matter of perspective and experience, with all parties holding a different view. 
With that being said, words that hold such a negative meaning should not be publically thrown about, given their public connotation. It leads to an, as phrased before, unpleasant image. A public viewer without context will take it by its public meaning. The word may hold no weight between the friends, but does to other viewers. 
Privately is your own decision. If the word holds no value between your friends then it is not offensive in your private setting. For example, If two staff were to go about using the words while the only staff online, no one would know, and nothing would change. Once it spills over to public chat everyone is privy to the conversation and we have this issue. 
At least that's my opinion, why I do not allow such usage on a public server yet do not condemn private groups using it amongst themselves.