The problem with this is we have to almost be psychic or know every single possible offensive word in advance. Yes we have contacted the member and politely suggested they choose another name as that word is against our rules, but I'd prefer if meanwhile the name temporarily displays with the censored version.
I can see how it might be annoying to have several users with the name ****, or even ********, but I would actually prefer that to people stumbling upon offensive usernames in the member list by accident.
I think it should be an option for this to work retrospectively.