both sides are right and wrong.
USArmy dun fuct up by stretching out the phrase (Chink 'yada yada yada' in the Armor). If they left the phrase intact then no problemo but chopping it up the way they did makes it awkward and seemingly offensive to those too lazy to read the sentence in it's entirety.
USArmy should've known better
Not really the person writing the phrase phrased it awkwardly yes. But still there is no way to take that phrase as racist without trying purposely to read racism into it and even then it makes no logical sense.
Read it like this ("Racist term for chinese person" yada yada yada in the Armor.) Does that make any sense to anyone?