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On the one hand, I get why people don't view "retard" as being that bad. It was common in media until semi-recently, and has undergone a similar change to "faggot" how most people will use it as a synonym for asshole or dick while not always intending for it to reference homosexuality. (in this case retard = stupid/idiot, not necessarily having a mental condition).
Ironically, mentally retarded was more politically correct at its inception, but has since evolved into a slur in recent times. Case and point, all the retards calling each other retards ITT and on this site in general. I would personally rank it on the lower tier of slurs, but it's a slur nonetheless since the intention is to insult and belittle someone. If you think otherwise, call someone a retard IRL and see how that works out for you.
I think it can still be tolerable and funny in certain circumstances, but you should be prepared for the consequences if you're using it with strangers or in public.
Veibae is an edgy attention-whore who is just saying it for free publicity, but what she didn't consider is that it's bad optics for a public figure like herself. We'll see if it has actual bad repercussions with Mythic, but overall it was just a pretty retarded thing for her to do.