I am from Europe and quite frankly:
I am GLAD that stuff like his is not really a topic in my country.
So, someone calls you a hun or something? Ppl call me hun over the mic too. I never considered it bad and never thought bout it. if you do, ither ask him politely not to, or tell him you dont want him to call you that, or drop him or the group.
Some ppl are ......... Thats fact. Some can change, some cant. Some grew in different enviroment then you did, some in different era. Its near impossible to explain 60 years old guy that the behaviour he was doing his entire life is incorrect. Or that what is totally okay in Italy (not my country) is not okay in MMO game.
While playing MMO, you are entering international relationships. I have Chinese, Japanese, Europeans, Australan and few Americans in my guild. Heck, wouldnt be surprised if we get someone from India eventually. All these people believe in different things and culturaly are educated differently. You can either attack their beliefs, report them and became infamous, or you can ignore their actions. Or you can ask them not to do it.
Some will stop. Some wont. Some will apologies. Some will laugh at you.
Welcome in international game.