Usually, but some shows, like local shows, might use electronic transcribers.
And yes, sometimes the reception does get screwed up, although it used to be worse. I remember at Gallaudet, when I was there in 87-88, sometimes we’d get several seconds of black panels where the captions should be. So yeah, your TV could be screwing up and not differentiating between ’ and u for some reason.
It’s worse the other way. Take the show Switched at Birth: from what I can tell, the Deaf actors do their own translations, and they are translating into ASL for the most part, but the script has been written without regard to the fact that some of it will be translated into another language, so the Deaf actors lines are full of metaphors and idioms that have to be interpreted or paraphrased rather than word-for-word translated. But the script as it was written is used in the subtitles for the hearing audience, and it is wonderfully clash-worthy. I have to deliberately avoid looking at the subtitles, or it interferes with my understanding the signs, because they are so different most of the time.
If it’s a word that is allowed (like “damn,” or “hell,”) then it goes through, because I’m pretty sure I’ve seen those. If it’s a word that a short delay would censor on a live broadcast, but it didn’t get caught on the audio, the captions may still be required to censor it, since they have a de facto delay, is all I can guess, because no, Deaf people are not more delicate, and if you watch an R-rated DVD with captions, all the f-words and s-words are there; I assume they are there on an HBO or Showtime movie or original program. Maybe someone with one of those channels can check and report back.
Interpreters can be fired if they get caught altering content to censor bad words (there was actually a case once where a religious nut interpreter claimed her freedom of religion was being interfered with when she was censoring a public school student’s classes by changing “damn” and “hell” in an English class discussion of The Scarlet Letter, and got told to stop it-- she lost), so I would think the same thing would happen to transcribers. If they are trained as court transcribers, they are probably already vetted for this kind of behavior (ie, as people who wouldn’t do it), because I assume that you can’t get away with this when you are transcribing a court case.