1. Tell them their idea stinks.
2. Ignore them.
3. Offer a better solution.
If I truly believe that great art doesn't need to stand on the crutches of vulgarity, I should be able to come up with a better alternative line every time. Telling them their idea was bad or just ignoring them is in no way honoring, but acknowledging their idea and gently adjusting it is a way to make them feel valued and understood.
In my experience, most writers admit they don't really want to be vulgar anyway, which leads me to believe they are trying to appease someone else's expectations rather than their own. A good collaborator will try to speak 100% truth in 100% grace at all times.
Keep writing (and speaking truth gracefully),
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