Obviously the mods were not bothered about offending anyone because they wouldn't delete it, simple as. No ifs or buts...no delete because they opted for it to stay and whoever was offended was not even given a minutes thought or consideration.
In fairness, neither of the people 'offended' reported it, so all that could be discussed was your wish for it to be deleted. As others have stated because people were already discussing the thread it then becomes an issue of moderating peoples posts who wanted their view to stay. It's a thin line as it shows. I only saw the outcome but from reading the discussion and the views on what should be done, I think the action was correct personally. If there had been other reports that maybe would have changed it, but in isolation and as the thread was ongoing that choice of action was taken. Sometimes mods get decisions right, sometimes they maybe don't. On balance, and with the info at hand, I'd say the action the mods involved took was right and something I would have sided with.