EULA
3.2 Disruption. You may not in any way disrupt or interfere with the Game experience of other players, including the disruption of Square Enix's computers and servers.
Disruption of another's game play experience.

Prohibited Activities
■Harassment
・Other actions that are generally regarded as actions that inflict deep emotional distress on another person
With regard to character names, if a phrase equating to harassment is formed within the full name, this is also regarded as harassment.
■Nuisance behaviour
"Nuisance behaviour" means speech or behaviour that hurts others or obstructs game play, but which is not classified as harassment. Even if it was not the intention, a penalty may be imposed if the end result was that another person was hurt or obstructed.
◆Offensive expression
・Expressions that significantly lack consideration for another person
・Expressions that any reasonable person would find offensive
・Expressions that attempt to unilaterally exclude someone from the game or content/community, etc.
◆Obstruction of play
・Other obstruction of play
This means all other behaviour that deliberately obstructs another person's game play by some means.
◆Impersonation
■Ignoring the Game Master (GM)'s instructions (Possibly)

There's plenty of rules being broken given the in game conversation and the actions the other party has taken.