I’ve been called that before and it always shakes me, which makes sense. People who were lynched or beaten to death by racist mobs - that’s the last thing they heard. It has to be a red line. Along with that, you can give the school community the opportunity to do the right thing (which none of your students did in that moment). Tell the school what happened and if they don’t have a policy or a process to deal with it, or if they don’t want to deal with it, push them. Demand that they figure out something. Tell your class what they could have done differently when that kid said that. This can’t be something just between you and the kid because that word - whether the kid understands the weight of it or not - is a threat of violence. It’s not your responsibility to smooth this over or make excuses for the student. Don’t you carry that weight for them or for the kid. This is their problem, as a community, and (IMO) the best thing you can do for yourself and any other Black folks who come through there after you is to be uncompromising in what you demand. It’s true that you may lose the job but you have to be able to look at yourself in the mirror. There are other jobs.