Justin: Hey.
Josh: Hey man.
Justin: Why only "man"?
Josh: It feels weird saying the r a c e y names.
Justin: I don't mind.
Josh: Okay, S L A V E.
Justin: Oh no, not T H A T one!
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Explanation
The joke plays on the discomfort of using historically charged words. Josh avoids 'racey names' but then uses 'slave,' which is far more offensive. Justin's reaction shows the unexpected shock of that specific word choice.