[Note: this email contains some rude words]
Thus spake Jimbo:
What's our exact policy on this? I'd be happy to issue a ruling, but I'd prefer to stick with exact precedent. But I don't remember what that is.
[[Wikipedia:Username]] contains some recommendations to avoid certain types of username, and also states "Wikipedia *does not allow* inflammatory user names" (it also says some weird stuff about voting and sysops being able to ban people with offensive names, but I'll pass over that as it isn't really relevant here).
As for precedents: User:Throbbing Monster Cock was deemed unacceptable (by your good self, if I remember rightly), and was forcibly changed to User:TMC. He later returned as Swollen Cock of Doom and Throbbing monster cock - these were also banned. More recently, User:Saddam Hussein was forcibly changed to User:SH. User:Fuck and User:FuckingFucker have also been banned, no doubt partly due to their username, but they also did a spot of random vandalism. I don't think there have been any other cases where a user has been forced to change their name.
As far as I know, there has not yet been a case where somebody has suggested a name is unacceptable without said name later being forcibly changed. In that sense, no limit has been established on what is considered "unacceptable".
A parallel which might be worth considering here is the article originally titled [[AIDS Kills Fags Dead]]. After some debate, the page was moved to [[Slogan 'AIDS Kills Fags Dead']] lest people should see the name of the page in search results or on Recent Changes and think we were making a statement.
Just to be clear: I don't necessarily agree with decisions which have been made in the past (nor do I necessarily disagree with them), and I'm not trying to suggest a course of action which should be taken in this case. I'm just laying out what's been done before.
Lee (Camembert)