Dev is a troll. They probably want this kind of attention and this publicity. Don't feed the trolls. That's all I have to say.
This is pretty much the extent of things.
The game looks silly as fuck, as if made from the lyrics of some angsty emo song from 2007, but I wouldn't forbid a game from existing based on content, just as we don't forbid movies based on content, just age-restrict them.
It's really important to note that nobody is actually required to do this, and WHO is actually doing it. In the united states, the MPAA rates movies, and they're a private organization, not a governmental one. If a theatre decided they didn't care about the MPAA, they could show any movie they wanted, regardless of the MPAA's not having approved of that movie. Independent film festivals and adult or bootleg video stores do this. In the united states, the ESRB rates games, and retailers (Gamestop and department stores)
choose to enforce their ratings. The state of California attempted to pass a law making it illegal to sell mature-rated video games to minors, effectively making ESRB's word law, and this was struck down by the supreme court. Steam and and other online game retailers that sell indie games is make good examples of sellers that don't require ESRB ratings, or verify the age of buyers. PEGI does Europoean ratings, and I think that similar to the US situation, their ratings aren't legally enforced in the UK.
What I'm trying to say is, the question "How far can videogames go?" shouldn't really be asked. There are actual porn games. You knew that, right? Games can go wherever any other form of expression can go, and there isn't (and shouldn't be!) any restriction on them beyond those on normal speech. This means that games can be as offensive as they want, limited only by their audience's willingness to buy them and their creator's willingness to bear criticism.