I remember distinctly when Karen was a white, 40-something woman with a highlighted blonde bob who was bolshy with customer service staff and always demanded to see the manager. I thought it was a weirdly specific stereotype. What did her hairstyle have to do with it? It was about being assertive, nothing to do with racism.
Of course, as with all lazy and stupid misogynistic slurs, it was almost immediately hurled at any woman the idiot hurler wanted to shut up without having to do any thinking. It was, indeed, mostly used online when you couldn't possibly know someone's race, sex, age, hairdo or frequency of managerial interactions. I once saw someone accused of being a Karen who turned out to be a Middle Eastern man. Oops.
After about five minutes (as long as it took for the slur to take hold of all women and, indeed, some men from the Middle East), it was realised that Karen was looking a bit stupid as a slur, so she had better become a racist as well in order to validate it for the thickos who use it. Someone tell OP's nephew. As before, if you think nobody would ever use it on a 40-something black woman who won't shut up when she's told to, I've got a bridge to sell you.
Insisting that the problem is just that people aren't aren't the slur in the RIGHT way (and what do you expect from anyone stupid enough to use it at all? What, you thought it was the sign of an agile mind?) misses the point completely, and won't change the way it's being used.
If someone is being a myopic, hateful, bigoted racist arsewipe, why wouldn't you use a term like that? At the very least people will all know what you mean, as opposed to a lazy catch-all term that is apparently always being used incorrectly.