This sounds more like a developer who wanted his product out there and did not want to wait for the 3.0. As a result the DEVELOPER censored his own stuff in order to get the product to market quickly...
Maybe now that 3.0 is out he can re-submit the product with the other words that were taking out, intact and add the 17+ to it.
Actually, what Phil wrote doesnt make sense. In my opinion, hes trying to spin the issue so that Apple doesn't seem have a crazy censorship policy.
First, to say that the developer should have just waited for the 17+ rating to become available, so he could release an uncensored version is being disingenuous, because Apple wouldnt tell him WHEN it would become available (perhaps other than sometime soon). Meanwhile, his competition, which also was uncensored (according to Phil), and with much lower ratings, was already in the app store being sold.
Second, Phils claim that it rejected because of new urban slang swear words, and not regular swear words doesnt seem to match with the specific examples the developer claims the App Store reviewer sent him, namely screen shots with words like ****.