That’s news to me. Spent a lot of time in the pagan community when I was young and stupid. Never heard it ever being regarded as a derogatory term. Most pagans I knew wore it as a badge of honour.
Being in the UK, I associate Celtic culture as being primarily Scottish, Irish or Welsh. Although the term “Celt” does date much further back than modern Celtic traditions.
Like moronic millenial knuckle-dragger JD Vance.