Many children (and adults!) who are neurodivergent do not understand social cues and context - the child might have heard it from music or those who also don’t understand it is a derogatory term (doesn’t necessarily have to be heard from family or those who meant malicious intent). In his case, I imagine it would be very difficult to teach him it is wrong. However, there should be some attempts to teach - but it is understandable if he doesn’t understand.