This is a wonderful example of why human communication isn't only based on the semantic meaning of words. Flirting, sarcasm, irony - all would be lost to someone just parsing words, not being able to understand the finer communication on a subconscious level: Body language, rapport, etc.
I wouldn't be surprised if people who would call someone out on that language have a higher chance on being diagnosed with autism or sociopathy - which in itself isn't bad at all, but it helpts being aware that communication between humans is apparently perceived completely differently by different groups.
Behavior like that makes me far more angry than rude comments.
If someone told me to mind my language over a casual board game, I'd tell them to fuck off. A friendly jibe is just a friendly jibe, regardless of whether it had the word 'shit' in it or not. Words matter, but far less than intent does - and the intent of telling someone to clean up their act in a casual setting is that they're patronising you.
Err, no we don't. We have a society specifically to co-exist with each other. Proactively policing each other actually reduces our ability to co-exist.
In terms of profanity, if someone says "man, I had a really shitty day today", that's not really harmful and doesn't have significant consequences. But when someone says "you are a real piece of shit", that is harmful, and does have consequences. It doesn't even matter how the recipient felt. The giver had an intent of harm that was driven probably by anger.
It's the verbal equivalent to punching someone in the nose. The aggressor got angry and they wanted to inflict pain, in order to try to affect change to a scenario or thing they wanted to be different (that's what anger is). And regardless of whether the recipient was hurt, we as a society say that letting out your anger at someone in this way is not acceptable, that you are not allowed to try to injure someone, whether they felt it or not. Obviously our laws are a lot more lax about speech than about physicality, but it's the exact same concept just in different mediums.
A woman may receive a sexist comment and not be bothered. But we agree not to tolerate it, whether or not she was bothered by it, because the concept, and the intention, are simply not acceptable in our society. The point is not to tell her what to feel, but to enforce our moral values as a society. If you don't like that, fuck you.