A little while ago, Micorsoft suspended an Xbox Live account with the gamer tag “TheGAYERgamer” claiming it violated the Xbox Live policy on sexual innuendo in gamertags outlined in the company’s terms and conditions.
If someone was offended by that name why are they playing video games to begin with ? Sensitivity is not a sentiment associated with video games or networks where people are free to indulge their assholeness.
Changing his name because someone else may misinterpret it is really no big deal. You'd have to be a child to make a fuss over this. Of course, I've found that it's mostly kids playing on Xbox live anyway. It's a large part of why I sold my 360 and never played Halo 3. Halo 2 was ruined with adolescent kids and cheaters. After such a big waste of my money on the game and the subscription I found better things to spend my cash on.