I had a ship name blocked by the word basement before. I was very confused at first.
If at all possible I'd like the filter to not turn into one of those korean mmo filters (you know the ones...where you can't even carry on a normal conversation).
I think the profanity filter for chat is fine, but should not exist at all for ship names and player names.
I think a community based flag for profanity (for both names and ship names) is a much better idea - we've all seen fairly inappropriate ship and player names, that this filter does nothing to catch (esp ones that are deliberate misspellings or euphemisms), while here are 2 examples of extremely innocuous names that it does catch.