I agree slurs refer to people, but if you call a Japanese car a “rice cooker” (which is where this comes from) that’s insulting the people…
And, yeah, at least originally. “Kraut” is one of those things that really has evolved somewhat, especially through krautrock in the 70s and other things. And whether it’s racist is complex depending on definitions and blah blah blah. But it was definitely 100% coined as a slur.