Teens and preteens do stupid shit. Have a conversation with your brother about why those words are hurtful and not funny and how they would reflect on him outside of the house if he continues to use them and they become part of his daily lexicon
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as an older sibling it is your god-given right to beat his ass until he stops being a bigot (ironically or otherwise)
but to answer your question yes, i have seen this from The Kids. in the case of the one i know she at least admitted what she was saying was shitty and backtracked immediately when called out. she's also 9 so like, a simple admonishment was enough.
I think it would be more weird if they didn't. Silbilings, in my experience, usually insult each other and latch on to whatever worst/tasteless thing they can find; "fatty", "crippled", etc. I've seen plenty of silbilings regularly say "I hate you" and "go die".
Most* of those same silbilings grow up to be good friends later in life because there's a difference between actual hate and just saying it all the time. That said, if the insults are actual spiteful hate, and not purely because of rivalry, then I'd say that's rare and an actual problem. And I don't think there's a way to tell the difference over internet comments.
You can test it a little bit by saying something like "[Terrible Asian person] isn't black". If your silbiling thinks it'll annoy you they'll say "yeah they're not"; which will at least tell you it's not racism. However, if they think the opposite will annoy you then, yeah, they're going to say "yeah they are" and it'll still be unclear.
So like, what had are we talking about and are parents involved?
Not to advocate violence but if I had a younger sibling say shit like that to me, hands would be thrown. I've almost slapped a nephew before for constantly giving attitude to my mother. I am typically a very no confrontational and non-violent person but I do not take that kind of stuff lightly. I'm more impressed with you for keeping your cool this long. People do this and when they get away with it it only makes them think it's ok.
That's pretty yikes. I have no experience with something like this, sorry.
Kids pick this stuff up from somewhere, try and find out where it is. If it is other kids at school, he's probably doing it to try and sound tough or cool, and will probably grow out of it (or get the shit beaten out of him for saying it to the wrong person and learn his lesson that way)
If he's getting it from online sources be extremely careful, he might be falling down a rather nasty fascist/incel rabbit hole there. I'm not sure what age he is, but a lot of fascists will court young, as young and impressionable as possible, so don't think "he's too young for that sort of thing." if he has unrestricted or unmonitored internet access he could've very easily picked this stuff up online.
flipping out at any word has this inevitable side-effect
Sounds like edgy teen behavior, hopefully they don’t say anything like that in public, but if it’s just at home you may be able to explain WHY those words aren’t really funny and how they’re just lazy excuses to put other people down. There’s not a single race that doesn’t also have pejorative terms, and to have the roles flipped usually isn’t very fun.
One of my oldest friends had caught a stupid habit in high school. He and his friends, the pastiest kids you can find in all of west Asia, and they were referring to each other and sometimes others as "black" or the n-word. They grew out of it, thank fuck for that, but it was a weird period.
This specific thing you're suffering I've never seen, but kids doing dumb shit to get a rise out of older siblings is a tale as old as time, so is teens being edgy and "non-conforming." The escalation that you've noticed is clearly because the little dickhead is prodding your sensitive spots leaning on what works. Sometimes a good conversation, getting real and all that makes them stop, sometimes the kid doesn't stop until they grow out of it.