You don't understand free speech mate, sorry.
There is a massive difference between offensive and threatening language and the ability to argue a point. You will find that the dividing line comes usually when speech is discriminatory or incites violence. Oh and the distinction between 'physical' harm and verbal abuse is nonsense. A wee look at history will give you a clue how one leads to the other, and I'm sick of reading about young adults killing themselves at record rates because of verbal bullying.
Who gets to decide? Yes, the state. That's because the state embodies the legislature that creates the laws and codes that allow a civil and safe society to function. In theory we elect representatives to create such laws and appoint trained legal and enforcement bodies to ensure that the laws are enacted. This is society ensure people can go about their business without having to be harassed, harangued and vilified based on whatever spurious reason I or anyone else feels like. In exactly the same way (and for the avoidance of doubt it is EXACTLY the same) I could not walk up to someone in the street and call them an offensive name based on their skin colour. Or paint 'no blacks' on someone's front door, as recently happened in Manchester.
TL:DR 'Free speech' is not the right to say whatever the hell you like, to whoever you like, in any context without any sanction, and protecting people is not 'the nanny state'. Daily Mail for that pish.
If you are genuinely advocating allowing (encouraging?) an atmosphere where children can attend a football match, and if you cannot honestly see the difference between someone being racially abused in front of their kids and 'arguing against bad ideas or concepts' then you've lost the plot and are, frankly, an enabler of racism.
You also seem confused about China and seem to conflate a repressive state wishing to suppress anti-authority activities with a moron abusing someone at a football game.