The thing to remember here is that Spike is 90% image and talk. He slings around words like faggot and poof but never actually puts that homophobic language into any sort of action and as troublesome as the lingo is, that's something to remember. It's lingo, it's talk, it's a way to relate to the world that stems from working class homophobia and misogyny that he embraces as a persona but never really made into any sort of ideology. Kinky fuckery is the way he labels whatever Jack is into, but it's just words.
Not that the distinction helps anyone, here. It's a bad habit he needs to stop doing and maybe the struggle of even being in the same book as Jack, let alone the same page, could help with that.
"Who said I thought it was offensive?" Bristling, ready for the usual victorian sensibilities that he's been hearing about so much. But okay, honesty and openness, if only out of frustration.
"...I think maybe you're expecting things from me I can't deliver."