Oh, GREAT example, and I hope some other people in this thread are still reading.
The reason that works is that they are 'encoded', as you put it, as Nazis. Right? It's not something unrecognizable, we read the description and we think, "Nazi. Nazis are bad. I can kill them." That happens even though they aren't actually called Nazis, don't speak German, and don't have a weird cultural taboo against giving knives as gifts.
And it would make sense if actual Nazis took offense at that, and didn't want to read his books, or play an RPG based on it. But we don't care, because they are stinkin' Nazis! Win-win! Nazism isn't something you are born with, it's a conscious (if poorly made) choice, so it's fair.