I'm one of the room owners of the room you had this experience in.
The SOCVR has a well established set of guidance to have a room that should be a safe haven for those users that either want to help in moderating or had their question moderated in an unexpected way and want to discuss that.
The room is lively for 24/7 and sees a lot of chatter during the day interleaved with moderation requests. We have about 6 room owners that follow a laissez-faire style, which I'm a firm believer of.
For that style to work I have this guidance in our FAQ:
In absence of all room owners, the members lead by example.
I don't think it is a great example to talk about certain female characteristics, specially if based on the transcript it turns out to be targeted at a specific user, which should be covered by:
Moderate the post, not the user. Keep the discussion on the merits of the post, not on behavior of the user.
leaving out that our room is not supposed to moderate meta...
So it is clear that the regulars stepped over a line there.
I'm going to defend the RO that was partly present during the incident. They tried to defuse the situation with some messages to bring in a bigger perspective. That is the style I want the RO-team to practice. That unfortunately seemed to have an adverse effect. The users having the discussion felt they were supported by the RO and you didn't feel your remarks were taken into account.
It is logical that you then take the next step and flag stuff. Our room is not known for taking much (public) flags (I don't know how much stuff is flagged for a moderator) so when it happens the regulars respond disgruntled about that. I'll add some guidance for the kindergartenour regulars about that as well.
Now to answer your question:
Is it acceptable to make jokes about tits in chat? Is this Offensive?
Yes, it is acceptable to make jokes about any body part in chatrooms that are open for that, including tits. That by itself is not offensive. What is offensive is the context in which the joke (that is no longer a joke then) is made. When it seems to be about a specific user, specially in a derogatory way, it is off-limits. Flags are warranted.
Leaves the question if tits are on-topic in SOCVR. I honestly think they are not. Despite how much of our regulars seem to want to moderate them, we better don't touch that.