Yes it is racist is the answer (in its entirety). The truncated version we sing not racist though.
Francis Scott Key was certainly racist.
What the lines mean is that the British manipulated blacks into trying to fight for them. The British actually make no mention of trying to attract slaves in the original proclamation, only that they would accept blacks as freemen and not as slaves.
There were free blacks and slave blacks in the US at the time.
What the lines were was to admonish the people that switched sides whether they were freemen or not.
You could intrepret that as racist or not.
It was probably best that the poem was amended.