I don't take that argument seriously, it just sounds like a rationalization of realizing that despite knowing you're seeing someone doing something harmful to society BUT:
1. the person is doing anything anything illegal (yet)
2. questioning their ideology would take from your time, especially if he's sneaky with 1.
3. taking position would take you in a complicated situation where you will have to justify 1. and 2.

I especially don't take that argument from people who argue against leftists all day. If a guy spends six hours every day arguing against commies but he can't find five minutes to go after one nazi, it's not a matter of method, it's a matter of personal bias.

I mean… Actually, he kinda has a point. Racism is an inherently self-sabotaging belief. It's built around blaming other people for your own failings, which leads to zero self-improvement, and mistaking skin color for achievement. Racism guarantees being a loser. So, yeah. Tell me they are actively harming other people and I'll get upset, sure. But "They're a racist" is a bit like if someone told me "They're an alcoholic". My response is not to condemn and shun them, shrug and know they're already punishing themselves for their stupidity.