In my experience most native Americans do flinch to varying degrees when a non indigenous, non familiar person uses Indians, but it doesnt generally cut to the degree as the n-word does for African Americans. It might for First Nations members in Canada, as their experiences of marginalization may be different. Regrettably, there are worse slurs natives experience through their lives in America.
We are technically still Indians according to the US government. See Title 25 of the United States Code (simply titled Indians) or how 574 tribal entities by virtue of being federally recognized Indian Tribes are eligible for funding by the Bureau of Indian Affairs. The issue as to what to refer to indigenous Americans, as the preferences vary. Im not sure how many natives on this side of the boarder like First Nations as its seen by some as a Canadian thing. We are, after all, Americans also. Of course, I think you are right that non natives should generally not use the term Indian and tread gingerly when they do. I think Native American and Indigenous American are generally safe at this point, even if they sound clumsy to both native and non native ears.
Also, thanks Ocelot, for getting us back on topic. Erasing or altering native and colonial history is a big issue with indigenous people in the Americas. Like many marginalized groups, our point of view has been essentially erased in established history and present affairs. Some historians, activist, politicians, and journalists have fought to get the stories out, but this administration is undoing any progress made in unraveling the myth of American infallibility. I think many of us feel unseen and undervalued correcting historical events to include our perspective helps make us feel seen and of value. The choice not to rescind the medals continues a history of minimizing the value of native lives.