I'm not sure that "n^%&*er lover" isn't something that faculty would say aloud. I interviewed somewhere in Tennessee in the last few years, and there was one faculty member I met with (and had dinner with) that said things that were only a couple notches down from that.
That said, MH is absolutely full of ish in general, and that dumb article should not grace the pages of a good journal.
I hear you but there’s simply no way this happened. (Those “notches” are key) And this is exactly why you don’t present social observations based on personal authority. One incredible story is enough to cast doubt on everything he reports. He wants people to think that racism is pervasive; I come away thinking it’s so limited he has to make stuff up. And that he imagines a reader who won’t be skeptical of his assertions is scary and damning to the subfield that recognizes him as a serious scholar.
The n----lover thing seems pretty far fetched. I've never heard an academic say anything approaching that. Even for a full blown racist redneck (I've known plenty) it's not something they'd be likely to say to an acquaintance.
OTOH it could be that MH just really brings out the racism in people.
I've lived in the deep south for years. The small town adjacent to my small city is a well-known kl@n hotbed. I deal with these folks every day. I've seen and heard all kinds of r@cist stuff (but almost none from profs or admins at my uni). I've never heard anyone use that term in any context. Why? Because it's 1950s slang. There are far more modern ways to express the same sentiment. No one around here would ever use such antiquated language. They're not hipster enough to deploy ancient slang in an ironic way.