It doesn't change anything. The content is still available for anyone to see if they want to.
Censorship is about making content unavailable. Not giving the exact same visibility to everything out there isn't censorship. Or upvoting is also a form of censorship, since it moves content above less-upvoted comments making less-upvoted comments more likely to be missed by people who won't scroll to the end of the page.
And for anyone used to HN's way of doing things, it's not hard to spot faded comments and highlight them if they seem of interest given the context around them.
"Full Definition of CENSOR transitive verb : to examine in order to suppress or delete anything considered objectionable <censor the news>"[1]
At least, this is the case for the UK.
Personally, if someone called me a "git" or a "retard" I would take it exactly the same way, since they are both connotations for "idiot" or "slow thinker".
Using the word retard against people who do not have LD is a weak insult to them, but does cause hurt to a large number of weak, dis-empowered people.
Retard as an insult is fucking stupid and lazy because it misses the mark.
Except when it is. Given sufficient downvotes, a post will fade to the same color as the background, making it easy to scroll past and not see it. Whether you want to admit it or not, brigading happens here too, and once in a while a perfectly valid, thoughtful, and reasoned response is silenced because it doesn't fit in with the group mentality here.
The only solution for this issue would be for everyone to adopt a personal policy of only downvoting trolls, intentionally misleading comments, off topic comments, spam, and "me too!" style comments that don't contribute to the discussion. Unfortunately we're only human, and instead of rebutting a comment one disagrees with, many of the users here take the lazy path and downvote. There's no easy fix for that, so the brigading continues, as does the censorship of valid but controversial ideas.
As for the topic at hand; while I agree with most people that the word "retard" is offensive and derogatory towards a specific group of people, I find it hilarious that its use is being questioned by people running a site/service named after an equally offensive and derogatory word.