They are referring to the things that the old fogies do not even notice anymore. Old fogies have learned not to say the "N" word in and so, as long as they do not forget and slip, they truly believe that they are not being racist. Not forgetting and saying in public the type of thing that they say about minorities over highballs when it is just themselves with no minority persons present, seems to them sufficient to avoid the accusation of "Racist". But it is the very fact that these things are normalised to them and that they do not even perceive or notice the things like calling a man "Sambo" if he acknowledges having some African ancestry or a woman "Pocahontas" if she acknowledges having some Native American ancestry, is the sort of thing that raises a red flag among non-Racists. It is these things that they do not notice that are noticed. A different level of sensitivity and sensibility. The sort of locker room humour one expects in a lower middle class seventh grade gym class in the Seventies where White twelve year olds who are already indoctrinated into a mild form of racism is what is meant by "institutionalised". Someone wearing braces on his teeth will be called "Metal Mouth" and someone wearing eye glasses is called "Four Eyes" and so on in this vein, someone who says he has some Black ancestry gets called "Sambo" and these become nicknames that stick. Those using these nicknames think of it as good fun and humour and are unaware that such terms represent prejudices, stereotypes, and the basis for persecution. Their racism is of such a mild variety that it only informs what they do, their attitudes and base line, rather than being overt racists who actually are out to lynch people. As long as things seem "Normal" to them, they do not perceive the innate racism built into the System. They consider stereotypes accurate perceptions and were trained to perceive them as characteristic during boyhood. Far be it from them to question the wisdom of seventh grade locker room bullying.