OK, I'm back. Thank you for all the thoughtful comments. Since my thoughts on the subject are undecided, I found the pros and cons very interesting.
Yes, of course it was the N word, and I think the reason I found it so offensive was that it just came out of nowhere, and didn't seem to fit those characters or the movie. Of course, rap performers, gangsters and racists in movies, use the word all the time, usually to an annoying extent, even if you don't find the word offensive. And I don't find Mark Twain's use of it for the Jim character in Huckleberry Finn offensive, as it takes place in probably the early 19th century, and that really is what Jim would have been called. It was part of his name.
This felt different. I remember Eenie Meenie Miney Mo from my own childhood, and this was funny, the second line was "Catch a nickle by the toe." We always said it like that, and it never occurred to me to wonder what a nickle was doing with a toe. It wasn't until I grew up that it finally dawned on me what the rhyme probably originally said.
In this movie, the rhyme felt out of place. In fact, I would have thought it was American, not British, and I have never seen or heard the N word used in any British book or movie. And if it had any meaning in this otherwise hilarious tale of lighthearted murder, I don't know what it was. But I don't like censorship either. Which is why I still feel undecided about how appropriate this word is in the context of an ironic, wickedly funny movie.
If anyone wants to find it, I watched it on Tubi. It had ads, unfortunately. It may be available elsewhere.