You also have to look at it in context. Kitty didn’t straight up call him the N-word to be rude.
Idk if this was the point of it back then but it’s pretty relèvent today. I’ve seen so many people of color degrade other races and then want to get mad when they get called out for racism against another race. That’s pretty much what Kitty was trying to teach him.
This also goes for a lot of the hate within the lgbtq community like all the biphobia, and the “LGB leave out the T” movements that have been going on.