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.