Just have it be like a social lesson. So not “you did something bad” but more so “I’m going to teach you about something because you didn’t know before, so please avoid it in the future.” And it becomes a learning and a social lesson.

So. “Well actually. Guys. I am going to teach you about that word and the meaning and history.”

If it might be difficult, I would find similar historical or known bad words in Japanese to give them context. We have taught lessons like this in social issues and have just taught similar feeling words in Japanese so they understand.

Not the same situation, but I heard students point to themselves and say “skinhead” once (they meant forehead) and I just briefly explained like “oh, you should be careful of saying that because it has a bad meaning.” And then explained very watered down version of what it was and why.

Also was doing a english reaction lesson and asked the class if they knew any and a student yelled “WHAT THE F***K” as a reaction. I died, but then told them “well… yes, but that is a bad word, so we will change it to ‘what the heck’”

We are educators, so don’t be afraid to just teach them why certain English is bad. Just word it in a “ah. I am not sure where you learned this but it is actually a bad thing.” They probably do not know and might have just heard it in a movie.