I can confirm this. The search term alluded to, as well as all hashtags stemming from it, have been auto-tagged as nsfw in HashPix as well.
OT: We have just managed to carry out a conversation about a word that was not even mentioned once within the conversation itself. And yet, each one of us knows exactly which word we are alluding to. Voldemort, anyone? :)
If the word is banned you will get an error message saying "Instagram: (400) APINotAllowedError-This tag cannot be viewed" at the top.