In my experience, whenever I've seen people use the word "nigger" or "nigga" in game, a person or multiple people will jump on them with "that's racist, reporting" -- in an immature, childlike way. From what I can tell, most people aren't actually offended, but will jump at the chance to piss someone off just because the word is banned and be used against them. I've hardly ever seen the word be used in the "correct racist context", but it gets called racist every time because it's a banable word.

I personally think the word "nigga" being banned for racism is wholly ridiculous. Not only do blacks call each other nigga, but I've seen many instances of whites using it with blacks with no problem. I don't think this word has ever been used in an actual racist, offensive context. If someone fully intends to be a racist, hateful fuck, they're not gonna call a black person a nigga. It'll be nigger.

So yes. Context is everything and at the very least, nigga shouldn't be banned.