Banning the transphobic "joke" sends the wrong message. Think about it: Larry gets on the stage tells the audience what he thinks he's going to do for his next material, which is so abhorrent, that he's treated with dead silence and is walked out on. If anything, that's a perfect PSA or teachable moment how hating on people on the LGBT spectrum isn't funny.

So Twitch, if you ban that bit, what are you really saying? That you agree with Larry, and not the disapproving audience that walked out on him? If you stand for the community, you would keep the "joke" in as an example of how dumb Larry was being.