It's not theoretical for me. My FIL doesn't know I'm trans and he loves Fox News and called some person getting covered by Fox a t-word in a really hateful way about two years ago and it's made me feel less comfortable around him. He could have just said "I don't know about this trans stuff" which I get totally but by jumping to a slur he put a barrier up. I've begged my husband to "out" me to his family at some point and now I don't even bother because I can't get the stuff he said about people like me in front of me out of my mind. He's my FIL so I have to maintain a relationship with him but I don't go out of my way to more than the minimum. I just hang out with my MIL and focus on that relationship instead.
It would be the same with a stranger. If you call me a slur or use the slur around me without knowing that I AM ONE OF THOSE "SLUR WORDS" it would prevent me from being able to form a relationship with you on equal footing and would make me want to hide who I am from you which just amplifies the level of misunderstanding in the world.
Some people might say it's my fault because I take slurs personally but... I'm just human here. I don't wanna spend my life placating people who use slurs to describe me.
Thanks for articulating this; it's helpful. My only question is: words that are labels don't create hatred, although they might signify it. Will stopping words being used do anything to reduce any hate people feel and/or increase understanding, and conversely will allowing it add any hate to people and/or decrease understanding?