I don't think this is worth leaving over.
I get why you're upset by it.
Racism isn't cool anywhere whether it be the US, Australia, wherever. I don't see how it can be "humorous" to be using words like that.
That said, I don't think you should leave tengaged over it. I mean, what's it going to prove? The sad truth is that racism is going to exist in life. It definitely shouldn't exist, but you can't stop everyone from holding those beliefs.