Lifetime South Texan here.
Let me emphasize: “Güero” is SO-O not a slur. In fact, it’s invariably affectionate. It simply means “fair one” or “Blondie”.
It has no ugly connotations to it whatsoever. None. It almost surely dates back to the Old Wild West days of the 1800’s, probably even earlier.
I am Anglo-Saxon, white-skinned, but have black hair, and I have often been called “güerito”, in Mexico and throughout South Texas.
To take offense to it is ridiculous. In fact, for you to impute meanspiritedness to it is a bit of an insult to the person who called you that, and makes you look like a prissy prig. Because I guarantee, no pejoration was intended. Let’s face it, if you are not Hispanic, it is likely you DO look different from most Mexicans.
Interestingly, the Mexican word “negrito” to describe a Black person is also NOT a pejorative, not a hateful slur at all. It’s the word they use to describe a Black person. Pure ‘n’ simple.
There is a famous— and much beloved— boxer in Mexico who has white skin, freckles, and sports a thick shock of naturally red hair. His nickname, on TV and in the papers, is “El Canelo”. “The Cinnamon-Colored Guy”. El Canelo is positively worshipped in Mexico, and his nickname is a badge of the great affection and esteem in which he is held by the Mexican people.
In this situation, you need to be bighearted, cosmopolitan, and roll with it. They wouldn’t call you “güero” unless they liked you and felt comfortable around you. Get over it! Some versions of modern PC-ism are petty and ludicrous, truly.