Diaz’s whole shtick as a comedian is that he tells these off the cuff, crazy, somewhat believable, but always totally fictional stories about himself. They’re always super offensive, and paint him as a sort of greasy criminal/mobster.
So this clip alone isn’t really enough to come to any conclusions.
That would be truly awful if the stories he told were at all true, but without additional evidence I’m inclined to believe that they’re nothing more than a comedy routine.
The story in this video is offensive for sure, but in context it also wasn’t really all that taboo to make those types of jokes back when this was recorded.