The profanity filter blocks out words that shouldn't be considered profanity.
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Does this still occur in a newly created 1.21 world?

Yes, the profanity filter its self is non exclusionary. It can't tell if the words it deems inappropriate are actually being used as part of a larger word.
The system being used to monitor profanity is flawed.
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We're tracking this issue in REALMS-10191, so this ticket is being resolved and linked as a duplicate.
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