[riceflick]

the key difference is that Paul was intentionally mispronouncing Karthik's name.

K: Are you being racist, Paul? My name is Karthik, dude.
P: Kuthaar?
…
*Karthik explains Qatar/Paul blames Sam/etc* (nb, no one says Karthik's name at all during this minutes-long period)
...
K: What is my name?
P: (annoyed) K! Karthik.

Paul knew Karthik's name the entire time. Karthik was clearly uncomfortable with the "joke" and thought it was racist, but Paul continued to call him "Kuthaar" anyway. The fact that it took Paul three entire minutes to finally say "Karthik" correctly was pretty telling.

If that was the end of it and they made up afterwards, I don't think I would hold it against him. But the next day Paul doubled down (Maybe you should change your name / You don't know what REAL racism is / HOW DARE YOU USE THE RACE CARD). Nah. Paul just outed himself.

Karthik may have been too quick to bring up the "RACE CARDDD!!!!1111" but, if anything, Paul's behavior during that incident and the entire following day vindicated Karthik totally.