There's a famous story of Rav Akiva Eiger. At a Shabbat meal, a guest spilled a drink, and in a feat of incredible reactions, the Rav kneed the table and made it shake, feigning like he had tripped or something, so it seemed like it was his fault the drink spilled.
Embarrassing oneself for the sake of preventing someone else being embarrassed, if that's the only solution, does seem to be generally considered a praiseworthy thing to do. This kind of question is very context based though, it might not cause embarrassment to use the word correctly in many cases, and they might be grateful for being subtly corrected, but one has to develop wisdom in judging these things, and, just like the amazing reactions of Rav Akiva Eiger, it takes a lot of gadlus to get these subtleties of bein adam lechavero right.
May Hashem help, and have mercy.