I have been running an instance without a slur filter for about a year and a half. It is not a big instance, but big enough to have some experience in the field.

In case you are curious, 100% of the many times that I have encountered the n-word in my instance it has been in the context of a very banable offense, and it often requires spending some effort investigating and purging images from the database. The slur filter would block many these federated posts and comments from reaching my instance without the troll/spammer getting any feedback about this.

The filter can be a useful practical tool. The reason I keep it off is because I'm stubborn about not policing the words that people can and can't say. But when I consider what I have experienced and reflect about this, I become more and more skeptical about my choice. The problem is still manageable for my small instance, so I can keep the slur filter off. But I can see that when dealing with this problem at a much larger scale one would want to use any tool at their disposal to make the job easier.