An improvement but it's still pretty broken. T-w-a-t is blocked but twatface makes it through. I can come up with at least a dozen more offensive English words that have not been blocked.

Has anything been done to prevent the swear filter from breaking URLs?

Again I have to ask, why do we even have a swear filter? Unpleasantries already occur despite the filter and censorship goes very much against the spirit of the free software community.