This puzzle is not actually a stream of profanity, but is actually a nice obfuscation of:
a logic-grid, where 'C******' masks 'COUNTRY' and the other asterisked words represent either 'professions' (of sorts) or nationalities. Altogether, they define a well-known joke (note the humor tag, after all...) which describes the concepts of 'Heaven and Hell' based on national stereotypes.
DISCLAIMER: The provision of this answer does not serve as an endorsement of the stereotypes or the quality of the joke!
The asterisked words in the text are as follows:
(1) In Scenario One the LOVERS are SWISS
(2) In Scenario Two the LOVERS are not ITALIAN
(3) No COUNTRY has the same type of people in Scenarios One and Two
(4) The CHEFS in Scenario One and POLICE in Scenario Two belong to the same COUNTRY
(5) Of the MECHANICS in Scenario One and CHEFS in Scenario Two, one belongs to ITALY and the other belongs to FRANCE
(6) The MECHANICS in Scenario Two are GERMAN
(7) In Scenario One the COUNTRY that organises everything has fewer letters than the COUNTRY that has the POLICE
The traditional appropriate information to complete these two scenarios is as follows, beginning with the second scenario (since this is its traditional order...):
HEAVEN is where: The POLICE are BRITISH, the CHEFS are ITALIAN, the MECHANICS are GERMAN, the LOVERS are FRENCH, and it's all organised by the SWISS. (Positive stereotyping...)
HELL is where: The POLICE are GERMAN, the CHEFS are BRITISH, the MECHANICS are FRENCH, the LOVERS are SWISS, and it's all organised by the ITALIANS!! (Negative stereotyping...)
If we explicitly try to solve this as a logic-grid:
Our 5 'professions' are: CHEFS, LOVERS, MECHANICS, POLICE and 'who organises it' (which we shall call 'ORGANISERS').
Our 5 nationalities are: BRITISH (B), FRENCH (F), GERMAN (G), ITALIAN (I), SWISS (S).
Scenarios 1 and 2 are abbreviated to 'S1' and 'S2', respectively.
Step 1: (1) --> S1 Lovers = SWISS. (6) --> S2 Mechanics = GERMAN. (2) S2 Lovers ≠ Italian. (3) --> S2 Lovers ≠ Swiss & S1 Mechanics ≠ German.
Step 2: (5) --> S1 Mechanics = France/Italy, S2 Chefs = France/Italy. (4) --> Nationality of S1 Chefs = Nationality of S2 Police (i.e. must be British, French or Italian, since only these are common to both). Only one option remaining for Swiss in S2 now, so S2 Organisers = SWISS.
Step 3: At this point I'm pretty sure the only way to solve it uniquely is to make sure we consider the country of the British to be BRITAIN, rather than 'Great Britain'. This way, (7) --> S1 Organisers cannot be German or British (since both countries ('Germany' and 'Britain') have 7 letters and cannot possibly have 'fewer letters than the country that has the police'. This means the S1 Organisers must be either French or Italian. Since the Mechanics are similarly defined, the S1 Chefs (who are British, French or Italian) must now be British by elimination. So S1 Chefs = BRITISH, and by deduction S1 Police = GERMAN.
Step 4: (4) --> S2 Police = BRITISH. By deduction, S2 Lovers = FRENCH, and S2 Chefs = ITALIAN.
Step 5: (5) --> S1 Mechanics = FRENCH (since S2 Chefs are Italian). Finally, all that remains is S1 Organisers = ITALIAN.
Having now solved this by logic alone, it's worth noting that these pairings correspond to common national stereotypes (e.g. Italy's connections with fine cuisine and Switzerland's reputation for efficiency and success...). Whether or not the negative stereotypes actually hold true is not for me to judge...!