Oh another last thing regarding freedom of speech on Xbox private service, I'm sorry to break it with you but it doesn't apply in any private service or even company. Why? Try to look it up or ask your teacher what is Freedom of speech limitation in our first amendment.
the U.S. Constitution covers only what the U.S. Government can and cannot do. The First Amendment - Freedom of Speech - specifically says "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
Code of conduct : http://enforcement.xbox.com/home/codeofconduct
Literally nobody cares if you throw away your Xbox, you already spend money on it and your just wasting more money trying to look for a game service that doesn't banned stupid people saying profanity in their communication. The problem with telling a private own game service of Xbox that restrict freedom of speech is that it completely overlooks the utter immaturity of the one doing the insulting to begin with. Seriously, if you're going to address Xbox rules and the banned you receives, just change your immature behavior otherwise you're just grasping at straws in a pathetic attempt to fight for nothing.
The only problem with trash talking is that those who truly are immature can't reel in their mouth breather instincts far enough to keep it in everyone else's comfort zone.
It's those who can't handle treating others with a little common courtesy and respect that don't need to be involved in the gaming community... and I couldn't care less if they see their own way out or get their immature a$$ kicked out of XBL ;)
If you bother to read the Xbox ToS and CoC in the beginning when you made an account, you can easily answer the case review questionnaire. Its that simple.
Rules are rules, if you break them you will be punish. Learn and move on.