The reason why “melon(s)” is on the banned word list is because the game’s developers decided that the only situation in which a player would use the word “melon(s)” is if they were talking about Grace’s breasts. On first glance that seems like a reasonable assumption as no melons of any kind are ever verbally or visually referenced throughout the game. However, you can potentially run into issues if you make analogies, use idioms or are just fucking around.
To be fair to the developers though, they were trying to make an AI system capable of understanding and responding to what the player was saying back in 2005, long before neural networks were even remotely plausible outside of the computer lab. I haven’t really gotten into figuring out how the AI system works, but most of what I’ve seen gives me the impression that it was pretty advanced and fairly well thought-out for the time. I imagine the lack of additional checks to insure that you’re actually making misogynistic comments about Grace’s breasts and not just using an analogy or idiom was more about technical limitations and time constraints than it was a lack of technical ability on the developers part.
If you want to know more about the system, the game has a gagfandom wiki with a page about it. I haven’t read it in enough detail to understand how the strike system actually works, nor do I know how the game determines what you’re talking about, however it seems to be a pretty comprehensive article regarding the strike system specifically.