That one can get muddy in a hurry.
With honest intentions, it's obviously fine. But it's not difficult to see how it could get off track for someone who wants to be offensive and hide it behind the "I was just quoting" card. For instance, here on the forum, we don't allow it.
On stuff like the N word, that's pretty easy as you can just say the "N-Word" and I don't think people would be offended. But on a phrase or longer quote AND used with less than noble intent, it could get muddy.
So I guess I'm not sure where that falls.