Depends who you ask. Some might say toxic expressions. Others might say people who declaim toxic expressions. Clearly MS has the latter goal in mind.
I can imagine a very reasonable argument for this. Someone who puts a Confederate flag on their car seems highly likely to engage in other toxic behaviors. Just like someone who calls someone a nigger once is likely to do it again. So we use the behaviors as a signal of underlying tendency. We don't want people who have this tendency on the platform because they will tend to make life worse for other users, and the loss of their business hurts us less than we gain from other people feeling more comfortable. Therefore we ban them.
This explanation really creeps me out, if major corps can just do about anything, based on any arbitrary rule ie. RND() or even own biases and legal discrimination.
On the other hand, too many on gaming platforms are engaging in clearly racist behaviour, ie. choosing offensive nicks, spamming chat, and need correction.
I'm sorry it creeps you out, but as a general rule company managers are free to do what they please with their company, as long as it is not illegal. Banning racists isn't illegal so ...
Some may say it’s not a significant problem and it’s cheaper for MS to make a PR statement about doing something than spending effort in moderation software changes.
I can imagine a very reasonable argument for this. Someone who puts a Confederate flag on their car seems highly likely to engage in other toxic behaviors. Just like someone who calls someone a nigger once is likely to do it again. So we use the behaviors as a signal of underlying tendency. We don't want people who have this tendency on the platform because they will tend to make life worse for other users, and the loss of their business hurts us less than we gain from other people feeling more comfortable. Therefore we ban them.