The problem with the term "family friendly" is it can be either twisted or over-exaggerated to a level far beyond its original intent or meaning.
I think if more focus was placed on the expectation that members "exhibit mature behavior" and less on basing all decisions on maintaining a "family friendly" forum it would probably cause less confusion. The Code of Conduct itself is pretty clear. The consequences for not following it are also pretty clear. As long as that is clearly and consistently applied, there really isn't a need to over-emphasize such a vague term like "family friendly" no matter how much it might be a pet project of some.
But to be clear, I completely understand and agree with filtering out certain curse words, it's expanding that filter to attempt to limit entire concepts that seems misguided, because it is quite a slippery slope.
Today it's religious terminology, but what happens the next time an "offensive" topic rears its head? What about "police?" "Government?" "Recast?" "Prequel Trilogy?" All of those words have played a part in various unrest over the years, but are the words really the problem, or the context in which they're used?
Because if you agree it's the context, and not the words themselves, you should also consider the value of allowing yourselves the ability to moderate the specific use, instead of handing off that ability to an automated profanity filter.
Otherwise, I'm left with the impression that as long as it isn't restricted by the profanity filter, it must be okay. Or on the other hand, if someone tries to sell a replica Cross of Coronado, Holy Grail, or Spear of Destiny and those words are blocked out, is that person now somehow in violation of the Code of Conduct?
I certainly hope not, but the impression is they've crossed some kind of line, and I don't think that level of filtering is needed or deserved. This is just collateral damage from a totally unrelated problem, and won't really help solve the intended problem, which is preventing the discussion of certain topics.