The major issue with this model is that the offended person has options that are a bit less hostile and assuming of bad intent than "calling somebody out".

Unfortunately, we seem to be in a place where bad intent is taken for granted and merits an aggressive reaction rather than placing any responsibility on the offended party to be civil and open-minded in their response to be perceiving offense.

In the case of "burning a fag", our hypothetical American has the option of inquiring about the meaning of an unfamiliar idiom rather than jumping straight to calling out the speaker.