The ever dangerous words “in the opinion of the referee” applies here.
The LOTG simply state a player is sent off for “using offensive, insulting or abusive language and/or gestures”. What is OFFINABUS is a very subjective thing and ever changing. To say “any homophobic slur must treated as OFFINABUS” isn’t unreasonable.
I think the officiating crew handled things fairly well here. The referee saw the retaliation, sent off the player, but listened to the players about the circumstances and rescinded the card. Now, if the referee had actually heard what was said and understood it’s context I’m certain the Phoenix player would’ve been sent off. The problem lies in if nobody on the referee crew heard what was said then nothing can be done beyond noting these facts in a post game report (which would need to done anyway considering a send off was rescinded). I also think they handled the post situation well, San Diego is well within their rights as far as I’m concerned to demand the player be removed by the team, and Phoenix has the right not to. They seemed to work as well as they could to mediate a solution so the game could be finished but Phoenix didn’t want to help. It was a s- situation to be placed in as a referee and they came out of it not being the story when they easily could have.