I don't really think anyone cares about being called names unless its really bad. (n-word and social slurs).
Lunatic's modkill was uncalled for, insulting someone's play is exactly what he did. Calling me a cvnt nugget was sure, inappropriate but both of us dropped it and nobody really cared. The gameplay resumed as normal.
In a small community like this, you have to take in the perspective of both people. You can't take a corporate approach and apply policies onto everyone. This is a small niche community filled with intelligent minds. If all it takes to ruin your life is to insult you, that's pretty sad.
Now I have never hosted a mafia game, but this seems unfair. I've done some bad things in mafia like as Supa pointed out, trying to IP log someone. I didn't even get modkilled by that, because Supa actually took time to understand what happened. He didn't take a corporate approach and label things as good or bad automatically.