Then, we're taking that very real world thing and tying it to an evil being that uses it to torture and devour souls for all eternity.
In what way is this not offensive?
People have pointed to Horcruxes as being the same thing. But, they're not. They're the same thing as what D&D has chosen to link to someone's religion. Nothing in the real phylactery even comes anywhere remotely near it being a vessel for a damned soul that keeps a horrid monster "alive" forever. A Horcrux is a made up word for a made up concept. And, oh look, it's not offensive to anyone.
The point is, the term phylactery should never have been used in the first place. Thing is, most of us don't know what it is. In 1982 I can pretty much guarantee that most D&D gamers had zero idea what this word meant. It was just a cool sounding word. But that's the insidiousness of cultural appropriation. Sure it sounds cool. But, "I like it" and "Well, I just don't think enough people are offended by this" are not very good arguments.