I was being exagerated a lil bit with the go to the streets and kill someone. What I mean is that bad people start creating circles of bad people and people that are slightly bad and would become good otherwise end up joining these circles and going extreme.

It is not that we must allow people to say slurs, is that it is better for those people to say slurs in a public multicultural site, so that good people can essentially social pressure the slurers into simply not saying slurs. This was possible with centralized social networks, but with decentralization is not possible as the nature of decentralization means that those kind of people now can create their own bubbles of hate instead of having to behave to be in the public spaces.