A former cow-orker of mine had one of those dolls he bought for his kid. He brought it in to work and it did sound like it was saying "f*gg*t, f*gg*t". He tried to complain to the company that made it but they did not believe him. I quit working with him and never found out what happened after that.
I finally remember where I saw one. My uncle had oe for one of his kids. I remember listening to it, but I wouldn't have made out those words without being told what it was. The doll had been recalled, but I doubt my uncle returned it.
My kiddo doesn't get to watch the tubbies. Not for any insane political or personal view reasons though. We are trying to get her to pronounce word better, and this show does not help.