Oh also it doesn't fucking matter what most people would feel about new things. The gift giver isn't a stranger. They are married(assuming mother in law comment about the origin of the watch being replaced) and should know by now say least this much about the person they are sharing their life with.
How could you be this oblivious to who your partner is by saying most people would have appreciated it.
Using that reasoning then you are testing your spouse no more intimately than a complete stranger. That would hurt most people...
You didn't explain it or provide any additional context. You used it exactly as it has been used, word for word, as is used when it's being used as a slur.
I was clear to say without an explanation it is a slur.