Normally I wouldn't share something like this, but...
I nearly got demoted from knighthood for mocking
Terminus in what I believe was a harmless fashion. I thought that I knew Terminus well enough at the time that he'd understand the jocular context—heck, I'd have been fine with him jokingly mocking me in retaliation (lol). But apparently, according to the mod who brought the issue up in a thread, Terminus was greatly offended. I am not absolutely certain of the degree to which he was offended, or if he was offended at all; all I have is the mod's word on the issue (which said mod received via PM and personal analysis), and that's kind of the problem here.
You seem to be looking at this from the two parties' perspective (which isn't wrong), when you should also be taking into account the mod's perspective as well (granted, it'd be a lot if easier if we knew who this particular mod was...). The mods have it rough. With everyone complaining and such, it's hard to satisfy everyone without another member feeling as if they're being ignored or attacked or whatever. They can't win. They want what's best for both parties (members A and

, but it's impossible when member A feels satisfied with a mod's judgment or vindicated at the expense of member B feeling wronged. This appears to be worsened by the comedy of errors that seems to derive from the issue of whether or not something's offensive. And when the mod's actions fail to go someone's way, attribution error sets in, and it appears that the mod team is just bad at their job. I swear, I've been a mod on two sites before, but I'd never do it again. Kudos to the mods for being able to endure this day in and day out...