You're right on all points, context is extremely important. What we have to be aware of, us as mostly white males aged 18-45, is that the oppressed groups get to dictate the usage of the words and their direction in our society. That's why black people can decide to reclaim that word if they want to, and that's why Eugene Hutz of Gogol Bordello is able to use the term 'gypsy punk' as he pleases. If these groups want to transform the word as they see fit, make it every day usage, that's their prerogative. And I think that's the direction the term gypsy is taking overall. However, it's very different than white people making light of the word. If a white group of people decide to open a store and say they're selling "gypsy clothing" and they live "in the gypsy mindset", it's very different than a Roma person selling clothing inspired by their experiences and culture for a multitude of reasons.
I personally used the term gypsy for years, because of Fleetwood Mac. I had no idea the term had racist connotations attached to it, because that was simply the term that was used my whole life. And realistically, that's exactly how all racist terms enter the popular lexicon. Now when my Hungarian Roma friends moved here, they were appalled at how everyone asked them if they were gypsies. It was an absolute slap in the face, and for a while they were hesitant to talk about their heritage because they thought maybe America also wasn't receptive to Roma people. Their parents lived in fear of what that meant until realizing that Americans simply don't have that exposure to the word, the culture, the history. My friend explaining it to people was one where the user of the word usually blushed, apologized, learned something, and maybe walked away humbled and happy to know something., and made their parents feel more at ease over time. This is the power of call out culture.
On the other side of that, when my step mother's family moved here from Romania, her hearing the usage of gypsy made her also believe that Americans were in opposition to Roma culture, which led her to spew racist vitriol about them to everyone around her, convincing many people that Roma were criminals and dirty and deserved to be kicked out of countries. Now there are people, including my horrible father, who've never had any experience with Roma people, who believe these things, because there's no voice in their lives calling out these things as racist or complicit in dehumanization. Stevie Nicks is a wonderful person by all accounts, and I wouldn't doubt if when writing that song, someone were to come up to her and say "hey, the usage of the word gypsy is fairly offensive. Many governments use it as a buzzword to incite hatred against our people", I believe she would have gladly revised the song, and something like that can shift public usage and understanding very well.
Framing it purely as "it's violating free speech, it's a danger to society" is looking at it from the wrong perspective, seeing calling out as from a place of hate. And sadly a lot of it can be from hate and pitchforks. Ideally, I'd live in the world where calling out can be understood and purely educational; realistically, I'd prefer living in the world where calling out is around, if feared, because it causes people to watch their statements better, and we can work on collectively bringing people to understand a racist tweet someone made when they were 19 shouldn't spell their end of their careers.
Also speaking realistically, I feel that the problem is being confounded with that of accessibility of dirt of people due to the internet age. I don't think there would be much of a difference in reaction of the people if a public figure in the 80's were found to have made racist tweets 8 years earlier if the technology existed back then. We can all collectively accept that people said stupid things in the past when they were young, but this is the first time in our history where we're forced to confront exactly what they said when they said it and physically seeing it with the name attached. It's just a matter of re-learning and re-evaluating forgiveness and privacy.