Yes, GUEST,mg, I think that is a possible reason.

Of course, one sings whatever solo verses one likes in a chanty.

And plenty of chanties got "revived" with odd-ball lyrics that seem to have been atypical of if not absent in tradition. The whole "red-skinned maiden" stuff of "Rolling River" (Shenandoah) comes to mind.

But two tendencies converged, I think. 1. The tendency of 20th c. revival singers to think they needed to stick to the lyrics of whatever "version" of a song they received. 2. The tendency for "Sally Brown" to be quite stable - perhaps more stable than most chanties - in having that lyric somewhere in most renditions…meaning that nearly all models for revival singers would include that lyric. So, perhaps people felt stuck with it and, as you suggest, opted simply not to sing the song at all, rather than omit or bowdlerize the lyric.

All this sounds plausible to me, but people have been happy to bowdlerize or omit verses of other chanties. And indeed, back in the prime decades of Revival, "bright mulatta" would have been no big deal, i think. I mean, I've just listened to a recording of the sea music festival at Mystic Seaport in 1981, and TWO different acts sang "The Chinee Bumboatman"!

The neglect of "Sally Brown" started WAY back - back, I think, before this lyric might have been sensitive. So I think there are other reasons why the people who were popularizing certain repertoire were not interested.