That first bit reminds me of a hilarious CBC radio program a few years back. It was all about the "n-word", and they spent an hour discussing it without saying the word once (or maybe they said it exactly once). It was, more or less, an academic discourse on the history and nature of the word, so it was not as though the word was used in a prejudicial way. Context is everything after all, and we should not be afraid to use a word if the context is appropriate and understood by the reader or listener.

Unfortunately, we are also talking about a product aimed at children here. Children have less life experience and are less likely to understand the context. They are also less likely to understand the meaning of the word, and use it inappropriately. That's why people use much more discretion while speaking around children than they do with adults. It isn't necessarily a case that they think that bad words make a bad person.

As for copyright infringement, wouldn't that depend upon how the book is modified. If someone was to modify a book, that is still under copyright, and print copies of that edited book, then it would be copyright infringement. But what if someone used whiteout to remove the word and put a new word in its place. The author may not be pleased with that, but surely it isn't copyright infringement. Software can pretty much do the latter so the question remains, is it copyright infringement? (Again, the author may be offended but they probably don't have a legal leg to stand on.)