It is interesting to look at the role of formalised insults.
Flyting (Scots dialect: scolding) is a legacy of a Viking passtime. Sir David Lyndsay was among other things, a poet who exchanged flytings with King James V of Scotland, and satirised the court. It was an entertainment, it used sense of humour -ie balancing the humours- to correct something out of balance. We use queues to indicate humour, that will allow otherwise unsayable things to be said, exploring boundaries by where & what push-back is given, bonds the group when the right balance is struck, and prevents excessive pride and touchiness that would elevate someone completely beyond the group, alienating them. Satire of court had to be within certain bounds, but could push the pompous, boring or irritating, to curb behaviour that had quietly been annoying many.
Spoken word slams, can have improvised battle rap exchanges. The exchange with Eminem at the end of 8 Mile is a good example, where Eminem points out his opponent is playing on assumptions of being 'one of the people', but went to private school. There's a great series Have You Heard George's Podcast, where his sharp wit and ability to speak in a timely way in the moment to 'put people in their place', provides audience catharsis - a word Aristotle coined in relation to drama, the purging of emotions by metaphor to purifying eg of blood guilt (the furies are a powerful & dramatic image of mental illness and social death combined, that would hound people to suicide for certain crimes, getting right with the gods for such things was a big dewl for Greeks). Another favourite example of the role of battle rapping is The Rapping Nana Panda, Joy France. She shows the power of elegant creative insults, to gain respect and prestige by people who do not give that easily, and rearrange preconceptions about age and gender through that.
I would say there is a class and power issue about insults. Being able to draw on authorities and resources to prevent or revenge insults, typically implies having more of those than the insulter. It could be as minimal as being teachers pet, so having an account of who deserves detention believed. Or who can afford better lawyers in court over slander. In working class groups much importance is put on 'sorting things our' among yourselves, without appeal to external authorities - doing that in the long run bonds groups, and generates mechanisms for resolving tensions, but often involves unwritten rules new people may struggle to get, vs explicit rules for external appeal.
Taleb and Haidt develop this idea that taking some pushes and pushing back, exchanging insults, helps children become antifragile, and more self reliant. This is coloured by the US culture war. But it is notable that left wing activists and thinkers typically appeal to authorities of various kinds to police language, where rightwing thinkers and activists are more likely to rely on insults - Trump mocking Rubio was something difficult to imagine a Democrat doing, and had an impact.
So more widely I would put defence of insults, in the context of defence of satire. Tyrants, and the insecure, hate to be laughed at. Look at why Pooh Bear is banned in China. There is a balance to be struck, in what satire is acceptable, what insults are ok, what go too far. It is different in different cultures, it's dynamic. But in general, we respect people more who have a good sense of humour (proportionate, creative, timely insults included). We mistrust and recognise as implying separating from and asserting power over us, when someone's first instinct is to appeal to external structures of enforcement (though of course these exist for circumstances that go too far, bullying, defamation etc). Often silencing of minor insults (eg SLAPP suits) rather than 'giving as good as you get' is used by the insecure and pompous, or outright immoral (eg Bob Murray's suit against John Oliver) because the satire actually works, to diminish their prestige, or criticise something worthy of criticism they have been trying to make a forbidden topic.
Some further discussions of the role and importance of humour:
Can society exist without hierarchy?
How is Society shaped?
Lastly I would just mention societies are held together, and dynamically structured, by shared values. Durkheim observed that religious practices in the broadest sense, are about community bonding through sharing attitudes to sacred things - and challenging what is sacred comes to challenging the coherence of the community. The USA has made free speech a core value, attitudes to it are a kind of shibboleth. An interesting example of it though is tgat it's likely the USA will be one of the only countries where pre-pubescent looking sex dolls will be legal, because of the body of free speech law. Germany, and even the UK, view free speech differently. In the UK the prime minister must face direct questioning by MPs, in public, and subtle and not so subtle insults are exchanged, with an absolute rule on anyone in the House being called a liar. This requires a greater sense of appropriateness than US politics, and I would say has helped achieve less polarisation
(some favourite parliamentary insults: "He has something of the night about him" is said to have sunk a career of someone who did look a little like a vampire now you mention it, and "Like being savaged by a dead sheep" was a bit of repartee to criticism from a quietly spoken MP)