This thread is full of examples. Unfortunately, the mage Koakmasheen wasn't a potions specialist. It's the players who do it on purpose that you need to watch out for.
Discussed in the GURPS supplement GURPS Mixed Doubles, filled with sample Super Hero characters. One mentioned, Streaker, went into retirement in part because his crimefighting pseudonym (originally from the streaky afterimages from his Super Speed) was adopted as a term for running through a public place naked.
Lord Toede, an obese toad-faced hobgoblin, is a prominent low-grade villain from the Dragonlance D&D setting.
Ask a tinker gnome where he's from, and he'll probably say "Nevermind." He isn't trying to avoid answering or being rude; most tinker gnomes actually live in a large city on Krynn called Mount Nevermind. It got the name because a human explorer made the mistake of asking a native the name of the mountain and had to interrupt when the gnome started reciting the place's entire history.
Legend of the Five Rings: While at least a few developers knew actual Japanese to a meaningful degree, most names came up as random, nonsensical mashings of Japanese syllables. This means that you get characters with delightful names such as "Kuso" (turd) or "Baka" (stupid). Also, there was a respectable samurai woman named "O-ushi," which can mean "honorable cow." You Fight Like a Cow, indeed.
In BattleTech the Japanese-themed faction the Draconis Combine gets a Battlemech called the Dragon. Appropriate enough and not unfortunate since the faction's early leaders deliberately chose the Japanese theme. It becomes more unfortunate that they're known for rampant xenophobia, implied racism, cheating and backstabbing their hired mercenaries, and several atrocities (including planet scale genocide), after which they developed the Grand Dragon. Ouch.note Grand Dragon is a Ku Klux Klan rank.
There is a manufacturing company named Wangker Aerospace.
There is also a system in the periphery called Butte Hold. Somewhat appropriately, it is known for its Pirates.
The Zurich-Orbital Gemeinschaft bank from Shadowrun initializes to ZOG Bank. "ZOG" is an initialism for "Zionist Occupation Government," a neo-Nazi and white supremacist conspiracy theory that Jews secretly control national governments, combined with another offensive Jewish stereotype.
Yu-Gi-Oh!: Infernoid Harmadik for having Groin Attack implications in English, even though means third in Hungarian.