It's not racist. People accuse others of that term too flippantly. It is ignorant though.
Language changes a great deal over time, and slurs are no exception. What is a completely inoffensive label at some point can be a slur later on. What is a mild insult in one area can be much more severe somewhere else. Sometimes what was a slur can be reclaimed and become acceptable, even positive. But that can also depend on who is saying it and other contextual details. I don't know anything about "k!wifarms" but I wouldn't assume malicious intent without more information.
That example looks much like the No True Scotsman fallacy, since a word is redefined later to exclude what would be exceptions to their claim based on an added qualification. Person A also made Person B get the evidence to refute their claim rather than fulfilling the burden of proof themselves. I know it's not a formal debate or anything, but even so, bad faith arguments are just rude. Just own the mistake and say "you're right, I was only thinking of first world countries/liberal democracies/developed nations/whatever".
Next Mr. Beast video is going to be crazy