Having said that, I also understand the terror that this kind of issue generates in organisations. Imagine you're the dean of an institution in an environment where people only read the headlines in their Facebook news feeds. I can easily imagine the headline "Marshall School of Business refuses to discipline lecturer who repeatedly said the n-word in class" followed by a dissembling write-up of angry students and vague mentions of the fact it wasn't intentional. This kind of thing can turn into a reputational firestorm and do real long-term damage to student recruitment.
Deans of educational institutions are between a rock and a hard place. If they were in charge of the narrative, it would be possible to be reasonable and say "This wasn't something to be upset about, and here's why". But they rarely are in charge of the narrative and want to shut these issues down as quickly as possible.
I can imagine a reasonable way forward might be to get the students and lecturer together to talk over the issues, and have a nuanced discussion about differing languages, much like what's happening in some of the comments here. But by the time you've organised that the firestorm is well underway and the damage is already done.