Teresa says that her account was later suspended because other gamers found her profile "offensive." Microsoft has informed Joystiq that it hopes Teresa will come forward, so that the company can investigate the matter directly.
In a statement to Joystiq, Microsoft noted that users may not "create a gamertag or use text in other profile fields that include comments that look, sound like, stand for, hint at, abbreviate or insinuate content of a potentially sexual nature. Profiles that do are asked to change the language and suspended until changes are made." The company also stated that it does not allow Gamertags or profiles to identify any form of sexual orientation, though it is allowed in voice chat "where context is more easily explained to all players involved." Finally, Microsoft stated that harassment is "not condoned" and "taken very seriously."
Find the full statement after the break.
[Update: Microsoft's Stephen Toulouse -- an XBL team member -- has made a post on his personal blog regarding the situation and confirming that policy changes are being explored. The Gay & Lesbian Alliance Against Defamation (GLAAD) has also weighed in on the story, mentioning it is working with Toulouse with regards to Live -- and SCEA on its Home policies.]
"Harassment of any kind is not condoned and is taken very seriously; we strongly encourage Xbox Live members to immediately report inappropriate behavior through the compliant tools in the service so that it can be investigated and the appropriate action taken."
"The Xbox Live community grows daily, and we continue to explore methods and levels of enforcement to enhance the ways our members connect and have fun, while adhering to a code of conduct that encourages respect and keeps the service safe and fun for all our members."