I know one way you can do is create a custom text event as such, but this method has a drawback: this only works for people with the script installed, those who don't will still see the bad words being said.

on ^*:TEXT:*:#: {
  var %x = word1 word2 word3 word4 word5 word6 word7
  var %y = $numtok(%x,32)
  while (%y) {
    if ($gettok(%x,%y,32) isin $strip($1-)) {
      echo -mt # < $+ $nick($chan,$nick).pnick $+ > <censored>
      haltdef
    }
    dec %y
  }
}

Plus this will block the whole sentence instead of masking the bad words themselves. So overall, it's not a good approach.