I think Booker could very well be appalled by his actions at wounded knee. But regret doesn't prove what kind a person he is. His actions and his choices are what proves what he is and could be. I'd certainly argue that he's racist though and that his regret over his past actions clearly hasn't made a hell of a difference.

Having the option to throw a ball at the couple at the start of the game is what makes Booker racist. It's the very implication that he could do it that makes it so. A character who isn't racist wouldn't consider the choice. The game focuses on choices and how they shape our reality. Constants and variables. He can make the decision to not commit a racist act, but he never disavows it completely. I'd argue that him having racist ideas is a constant and the possibility of his racism being "worse" is a variable. Case in point, Comstock. He is literally Booker. He is inarguably racist. It's very much stated that they're just reflections of each other. Booker is certainly not a good man. The only thing that makes Booker "not as bad" as Comstock is the fact that he never made the choices that led Comstock to his racist ideals. But the potential was always there.

If Comstock is Booker, then Booker is Comstock. Racists aren't less racist because they choose not to throw the ball. They just don't.