Taking aspects of language from someone who does not truly understand why,

That is why you tell them why. "Hey, did you know that word is from the eugenics movement?" or "Hey here is why what you just said is racist." Saying that is akin to getting a part of your brain cut out is super extreme.

Telling someone that their actions which are fundamental to their being are hurtful to you, and they need to change, is in fact hurtful to them.

If using harmful words is fundamental to your being, you have a lot of other things to work on. Saying that you can't tell someone that they hurt you because it hurts them is some real victim blaming BS.

It’s not their fault how they were raised, and how their experiences have shaped them, no matter how horrible someone might be.

I never said it was, but they need to know what they do is harmful before they can start to unpack that.

But if we embrace the diversity they add to society,

No.

https://en.wikipedia.org/wiki/Paradox_of_tolerance

Only the individual can decide to change themself for the better.

Very true, but the first step is knowing you need to change.

And even then, it’s a life long journey,

Yup, and long journeys start with a single step.

and often only minimal changes are possible.

I would say sometimes, but what I find more true with the people I know, is that once the dam is broken, they start to look at the other things in their life that they can be better in and a cascade effect happens.

So, we should be celebrating the efforts they put forth, not condemning them for the things they don’t have the capacity to change.

I think this is where the meat of the rub lies. Telling someone what they are doing is hurtful is not a condemnation. People tend to take it that way and get defensive, but even the best of us has some gaps in their knowledge. Especially in colonized parts of the world. Being made aware of them is not an insult. It means someone cares enough to bring it to your attention and thinks that you don't actually want to say harmful things, and they believe you want to be better.

Sorry for the wall of text, but there was a lot to unravel there.