In theory, we don't tolerate it. However, sadly, in practice, we largely do - especially in the political threads.
This relates to several factors that I will try to explain.
Firstly, and probably most importantly, racism is a term with a very contested definition. We do consistently ban for using 'nigger' as an insult, this is such a clear cut case that there won't ever really be a discussion about 'whether this was racist'. (Although, when I described Testie as a racist in a recent thread, even that sparked a discussion. I got a couple PMs beside the posters who wanted to argue in that thread. ) Basically, even 'black people are genetically predisposed to crime' being considered racist - which so clearly is - sparks a big discussion about whether that is racism.
If most of the contested posts were in that territory, I'd happily say that we don't tolerate that and moderate more aggressively. Most posts about the topic are however not that clear cut. There are in fact a pretty significant number of posts from left-of-center posters arguing some form of 'we are all racist to some degree - we just want you to recognize it so we can try to alleviate the problem'. Obviously the guy who thinks black people are genetically inferior is racist. But how about the guy who thinks that african american culture to a lesser degree values academic achievement than asian-american culture, and who thinks this is negative? Obviously 'you fucking nigger' is racist - but what about a white 50 year old woman clutching her purse while walking past some african american 20 year olds in a slightly shoddy part of town? What about posters who think 'it makes sense that she would do that'? What about posters who genuinely have nothing against arabs, but consider Islam incompatible with 'western culture'?
Couple this, that it is often hard to define racism in a way that gets near universal agreement, and also that it's hard to define exactly 'how racist does it have to be actionable', with another factoid - the disagreements regarding 'what constitutes racism' largely align with other political opinions, and it becomes hard to moderate racism while maintaining the political threads as fairly neutral arenas for healthy discussion. This rang especially true for the 2016-17, where 'is Trump racist' and 'are Trump supporters racist for supporting a racist, if Trump is racist' were topics that were frequently revisisted. Adopting a hardliner stance against racism with a liberal definition of what constitutes racism would essentially lead to banning every Trump supporter - which would obviously make political discussions relevant to the current political climate impossible.
It's a balancing act, and I'm sure we have at some point(s) failed to moderate posts that 'should probably semi-objectively be considered racist'. But we've also been criticized by posters from the 'right' for being too harsh, resulting in accusations that we stifle political discussions. Furthermore, there is no denying that we overall have more posters who identify as 'left of center' (especially from an american point of view) - and at least from my point of view, insight into the conservative mindset is a very valuable element of the political threads.
We created the 'racism is not tolerated on teamliquid in any shape or form' rule a very long time ago, with a less mature community and a different internet-climate, and also during a period where politics was a smaller element of the general forum than it is today. Back then, it was very important to distance ourselves from the x17-y elements of the brood war community. Sadly, it is ever-relevant from a political point of view and banning all the posters that I myself think are 'some degree of racist' would definitely stifle potential discussion. We can always improve and pointing to specific instances where obvious racism was allowed to slide is fair game, but this is not something that is easy to moderate while maintaining a useful arena for real political discussion. I still stand by my opinion that this forum happens to be one of the places on the internet where 'conservatives' and 'liberals' still coexist, that it's one of the less echo-chambery places out there, and I think this quality of the forum is important to preserve.