Op is absolutely right and anyone saying they're just "too sensitive" needs to learn that the rest of the internet isn't 4chan and to learn to have some fricking decency and grow up. An M rating doesn't give you carte blanche to be an awful person or that there should be no moderation going on, fact of the matter is if you're doing this stuff in a lobby you're in a public place and should be acting as such.
I routinely see people spouting racist, homophobic, ableist or transphobic slurs in the lobby, in hard text or symbol arts or even incorporating them into their character names. And then there's the constant sexualization of everything, the game is pretty raunchy at times so it's understandable to a limit but when you're directing it towards unwanted targets or constantly talking about how you want to violate Quna at concerts it's well past that limit. As a girl I've had at least half a dozen people make unwanted sexual comments about me or my character and it's sickening. If y'all wanna do that stuff there's places in game for it and it's not in public lobbies and especially not directed to unwilling participants.
It's starting to really spoil an otherwise great game and there needs to be clearer rules and moderation around this stuff.