If someone insult's ppl as N-Word, he is also not literally saying the other person is a person of colour. And you can argue that beeing a person of colour is nothing wrong or bad. But still someone using this kind of insults is using a sterotype and connects beeing poc with bad character traits. Same goes for the small dick thing. Most insults aren't ment literally but using negative predjedices, connotations and stereotypes.

And your comment about not joking about my Penis, implying there would be a reason to is the point where out argument is going downhill the ad hominem way. I don't see what my Penis had to do with the insult beeing acceptable or not.