Personally, given this games circumstances, I do not believe this punishment deserves a mute. It's an event, and the hoster could've had this problem solved to begin with by silencing the room (that's why it was implemented to begin with), or by telling him spamming will result in a kick.
I do believe this name should be removed with a verbal warning on his account to not create characters with vulgar names, as well as to not spam when in-game.
That's just my 2cents though.
Edit: Seeing his past, the verbal warning should include that the next time he spams and/or does any other wrong doings, a warning will be added to his account.