The suggestion to highlight the offending words rather than completely rejecting the entire text is such a beautifully simple idea I'm annoyed we didn't think of it back when we were designing the original site layout.
Well done.
The number of times I have submitted long articles only to have them knocked back by the profanity filter put me completely off sunitting such work.
The profanity filter is far more a benefit to the sites day to day operation than the cost of inconvience of not being able to use a few select words in my opinion.
