In Boston, the Irish cops call the police transport van the "Paddy wagon".
I'm not going to argue with them.
OED says origin is uncertain. At this point, does "racist" just mean "involves group of people"?
The key thing is contextual intent, but it's important to not memoryhole the origins of words that might otherwise be best left firmly in the past. Not like we're short of ways to describe things.
As a descendant of Irish-American immigrants around time of the insult (see username), I'm aware that the group faced racism and injustice, but it doesn't come up. Some other groups obviously have faced worse in the US, and some continue to face injustice, and I guess I'm more sensitive to those.
There is even a well know Paddy Wagon bus tour company with a giant Leprechaun on the side - no one bats an eyelid.
https://www.nytimes.com/2020/05/28/us/george-floyd-national-...
When my mum was born, there were still signs that said "No Blacks, No Dogs, No Irish", she remembers them vividly along with the problems they caused for her. The Troubles have been a big topic in our lifetimes, and there's still a lot of anti-Irish sentiment, even in Liverpool. My teens were ruined for being a redhead and there was never a single day I wasn't covered in bruises and cuts, and I was bullied out of education at sixteen and wanted to kill myself for who I was.
Every day, I look in the mirror and can see my broken nose and facial scars from having the bridge of my spectacles punched into my nose when I was knocked unconscious and beaten by other pupils. I won't ever forget.
I'm also Ashkenazi Jewish on both sides, Sudanese and Indigenous American, so if you'd like to continue gatekeeping my feelings, go ahead. I can guarantee it won't go well for you.
If anything, it denigrates the subcultures in which the garment is popular. They probably don't need protection from language tut-tuts like us though.
And ironically, I hear the term most frequently from women, many of whom are now married and so, are wives. Still, it grates every time.