Context: Furbys were the toy for a year or two, and were actively marketed as learning from speech, had an active mic, and did adjust their speech based on what they heard, "learning" to speak English from Furbish. [^1] It's not so different from the fundamental fear of Alexa/Assistant/microphones that's fairly well diffused now. Except the Furby actively claimed to learn how to speak based on your speech, and had a…
That confirms what I remember from that time - kids were convinced you could teach it to say things, but I never saw any of them succeed. I think a big toy company would be somewhat averse to having their flagship product spew racial slurs.
To look at another example of how dishonest marketing tends to be aimed at kids, Kevin McCallister had a Talkboy in Home Alone 2 that, for purposes of the film, had absolutely insane fidelity when it came to recording a playback. As someone who actually owns one (I collect and repair old electronic toys and computers as a hobby), I can tell you that the film and marketing definitely oversold the devices capabilities. The playback in particular is really quite awful, and this assessment comes from a fully restored device.
Another interesting point in your comment reminds me of a parrot my grandma had when I was young. Not a visit to Grandma's would go by without little me trying to secretly teach it cuss words while nobody else was in the room. What a time!