I don't see what the problem in that screenshot is, unless you're talking about Hag's Breath?

If anyone is getting banned over names, it's for truly offensive ones that promote hate speech or beliefs, horrible irl acts, or are vulgar in some way. No one's getting banned for anything like Hag's Breath.

Essentially, don't worry about it. People HAVE had their characters' names changed before for being minor offensive/baiting things, but unless you keep using names that are getting changed or use names like what I mentioned, you shouldn't have any problems.

Rule of thumb: If you think a name might be too much, err on the side of caution and go with something else.

Edit to say reading comprehension is hard XD. The game IS rated M, which includes sexual themes as part of its, well, rating. However, in this case it's only implied and not outright said what he means. Look at the Lusty Argonian Maid books, they're the same way. Visit the Ebony Flask in Ebonheart, too, if you really want to see implicated things.

These things are different from outright vulgarity, though.