it's hard to understand what the argument is here other than that admins should stop muting people at all. Give some examples of specific admins muting specific players over specific instances and we can better judge things on a case by base basis. Even if a muting is retroactively judged as unjust, so what?
If you act like trash in chat, you should expect to be treated as such.
opinion from my experience as the head admin of the native battle server, from running many 200 man events for years in NW, and my observations watching other admins.
The most trouble I ever see from trolls and edge lords is when admins rule with an iron fist. The more an admin flexes their power the more a subset of players will be taking up arms against them. In the end you might end up muting or banning half a dozen or more players.
Practically speaking: I would let 1 player slur occasionally, rather than mute/ban them immediately and then subsequently have to do the same to another half dozen players taking up arms out of spite. Almost every time I see rampant flaming/racism/whatever on GK TDM, it is because an admin was too quick with the punishments.
In my admin experience, letting players express themselves how they wish is the best way to keep things under control. The occasional slur will be thrown out, and luckily we are all grown adults so we can handle that, and personally judge the character of the offender as we see fit. Admins are not needed until it is truly obnoxious and out of control, which I find rarely happens if you let players do what they want.
Maybe you cRPG admins are so vindictive that you feel you MUST immediately punish bad behavior. That's your prerogative. You'll end up punishing a lot more players that way, not all of whom are bad people.
in other news:
god hates long mauls