He stopped it because the crowd were booingHe put her in that position and it looks to me like he stops the "song" first to point out she'd said the word (it!).
FWIW The reason The Word was so offensive was because it was used so very generally to mean "bunch of people who look kinda human but arent and dont have or deserve the rights beyond those we'd give any other beast of burden". Thats what it meant and thats what it was used to mean by an extraordinarily large degree of the population incredibly casually as if it was so obviously true. So yeah I get that its not something that should be used to refer to any person ever. However that's not what happened here. It has become such a verboten word that even repeating it back to someone is reason for the circle jerk keyboard warriors to go into full fledged attack mode. He knew that when he brought her up on stage, he knew that when he stopped the song. He probably knew he'd suddenly get a million extra you tube hits and some name recognition on news websites when he did it too.