Talking fancy usually means that you use a certain structure of speech or a certain level of speech. In short it means that you express yourself properly while avoiding slang terms and unnecessary abbreviations. In order to talk fancy the avoidance of vulgar vocabulary is just as essential.
It is indeed possible to be insulting whilst talking fancy, but it requires the usage of sarcasm or very hash critique as a replacement of vulgar language. This would suggest that the means of communication switch from the mere usage or words to an artistic approach, carefully considering the contents.
In general it would be appropriate to keep a certain dignity about oneself in order to be convincing. If I were to talk fancy and insert vulgar vocabulary, slang terms or any other kind of terminology that would suggest a commonly lower standard, I would be not only subject to severe criticism, but also mark myself as a hypocrite. Quoting others who appreciate the usage of vulgar language is of course not inappropriate as long as the fact that somebody is quoted is obvious beyond doubt.
If you were in need of an adequate example of someone who talks fancy, you were just given such an example. I did strive to talk in a manner that could be considered "fancy" by many. To me however it is merely a form of communication that I was taught in school.
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