The word you mentioned is a bad word in brasilian portuguese,
Language Rules
Could someone please explain why there are language restrictions at all
It's business. It wants a broad appeal to potential customers. It's nothing philosophical about language, meaning, free speech, or whatever.
It's an English based site, so whatever naughty word filters they have likely filter primarily English words.

When you joined chess.com you read and agreed to the site TOS.
Put simply: be nice, no cheating!
- Chess.com is a friendly community for those who love chess! Please be on your best behavior as you play chess and interact with others. Failure to follow these rules will result in your account being closed.
Interacting with Members
- Chess.com is a safe place for people to come and enjoy. There should be no abusive language, personal attacks, threats, or any other unkind behavior.
Keep It Clean
- You may not post any offensive content on Chess.com including your username, avatar, or personal description. You may not add any offensive comments, chat, or other content. The following behavior is prohibited and can result in your being kicked or banned: cheating, using offensive/vulgar language, using toilet humor, making personal attacks, spamming or advertising competitive websites, religious or political debate, intentionally pointless/distracting posts, and discussion of illegal activities (drugs, etc).

When you joined chess.com you read and agreed to the site TOS.
https://support.chess.com/customer/en/portal/articles/1444772-what-are-the-site-s-policies-?b_id=12321
Put simply: be nice, no cheating!
Chess.com is a friendly community for those who love chess! Please be on your best behavior as you play chess and interact with others. Failure to follow these rules will result in your account being closed.Interacting with Members
Chess.com is a safe place for people to come and enjoy. There should be no abusive language, personal attacks, threats, or any other unkind behavior.Keep It Clean
You may not post any offensive content on Chess.com including your username, avatar, or personal description. You may not add any offensive comments, chat, or other content. The following behavior is prohibited and can result in your being kicked or banned: cheating, using offensive/vulgar language, using toilet humor, making personal attacks, spamming or advertising competitive websites, religious or political debate, intentionally pointless/distracting posts, and discussion of illegal activities (drugs, etc).
Hey, Admins? Yeah, I'm pointing the finger at YOU!
You see that last line? intentionally pointless/distracting posts
There a LOT of that in the threads, and they are not cleaned up! So why are you targeting specifically the profanity and political references and not removing the pointless/distracting posts? Sounds like profiling to me!
Let's implode the admin group and rehire. Send your application to a user that is knowledable at hacking who can hack the chess.com server and turn off all the admin settings for admin users and turn those settings on for the New and Improved Admin System!
I'm currently collecting petitions for this!

When you joined chess.com you read and agreed to the site TOS.
https://support.chess.com/customer/en/portal/articles/1444772-what-are-the-site-s-policies-?b_id=12321
Put simply: be nice, no cheating!
Chess.com is a friendly community for those who love chess! Please be on your best behavior as you play chess and interact with others. Failure to follow these rules will result in your account being closed.Interacting with Members
Chess.com is a safe place for people to come and enjoy. There should be no abusive language, personal attacks, threats, or any other unkind behavior.Keep It Clean
You may not post any offensive content on Chess.com including your username, avatar, or personal description. You may not add any offensive comments, chat, or other content. The following behavior is prohibited and can result in your being kicked or banned: cheating, using offensive/vulgar language, using toilet humor, making personal attacks, spamming or advertising competitive websites, religious or political debate, intentionally pointless/distracting posts, and discussion of illegal activities (drugs, etc).
Hey, Admins? Yeah, I'm pointing the finger at YOU!
You see that last line? intentionally pointless/distracting posts
There a LOT of that in the threads, and they are not cleaned up! So why are you targeting specifically the profanity and political references and not removing the pointless/distracting posts? Sounds like profiling to me!
Let's implode the admin group and rehire. Send your application to a user that is knowledable at hacking who can hack the chess.com server and turn off all the admin settings for admin users and turn those settings on for the New and Improved Admin System!
I'm currently collecting petitions for this!
You can always apply for a job with chess.com :-)
Admins do stuff like write HTML. Mods do stuff like ban users for foul language.
If owners don't care about trash forums, then moderators are doing fine. I don't think Erik cares to have a nice forum. More spam = more google hits.

There can be a blanket policy to avoid "offensive content," but they don't really do that, because it's impossible. I may say "I like Trump," or "I hate Trump," and that may offend someone - is that a reason to auto-resign me? At very least, players need a list of words that will cause auto-resignation...
If you get instant resigned then that's obviously a bot. List of words? Don't say anything you wouldn't be willing to say in front of your grandparents, in a church, etc.
Or, you know, just mis sp l and add rand om spa ces

Another example of the policy's not really taking "offensive" terms into account - in Arabic cultures, one of the most offensive words is "dog," when it's applied to a person. Yet, it doesn't auto-resign me when I use the word dog. Is the policy offensive language, or is the policy arbitrary terminology and morality imposed by anon admins?
Mostly it's by bots, it's not imposed, you agreed to it, and language (or culture) choice is explained above (it's an English based site). There are also ways to work around it... probably the best one explained by kaynight.

Here's the other problem with the Rules. What I am about to post below is simply 5 words, no profanity, no religion, no politics, no advertising, but it will probably be removed because the admins "perceive" it to be what it isn't simply because of the first letter of each word!
Terrorist
Racist
Unintelligent
Moronic
Prick
It's like asking some people for the "formal definition" of a 3 letter S word, or stains on blue dresses, etc.
Nothing in this post, technically, violates the rules, but they'll block it anyway!

Maybe it's more like -
Tell-is-as-it-is
Reality does count
Uncompromising with destructive elements
Master of economic growth
People's person.
What do I know?

Yeah, spammy/troll posts are officially against site rules. Probably could be moderated more heavily, especially outside of Off Topic. There would be a lot of complaints, probably a massive backlash and would require a lot of mutes.
In my opinion, that is lower priority on the unacceptable list but if the site wants to improve focus to that area, then it will end up being done.
Of course, there is more subjectivity in that area than in some of the other more forbidden areas and one of the reasons for more lax enforcement.

I wonder where do they draw the line, I may say idiot, stupid and be fine because those do not get censored. If I say a****le then it is considered bad, maybe a list of words is not enough, because the context really matters. A while ago I saw that someone complained that he got auto resigned for using the word "ape" while he and his opponent were talking about evolution.

I have issues with the language restrictions in general, but I really object to the concept of auto-resignation. It seems entirely arbitrary. Also with the fact that your clock can start before you make a move, but that's a different issue altogether.
The language restrictions, which I believe are filed under "profanity," don't seem to make a lot of sense. I can use a word in one language, and yet it auto-resigns me when I use the exact same word, with the exact same meaning, in another language. This doesn't seem to make sense. Also, many words are considered "profanity" on the site are not in culture. For example, the word "puto" is frequently used in public at American and Mexican soccer games. Trash talk is part of competition, including chess, particularly if you've ever played in a park or somewhere other than where rich, white kids are having a genteel competition in a prep-school library. Could someone please explain why there are language restrictions at all (beyond racism, which has no place in any competition)? Why am I not free to trash-talk my opponent to distract them during a blitz or bullet game, especially considering that they can disable the chat function? Is there a list of restricted words/terms, and where might I find it? Or is it just at the complete whim of the mods?