The leader of the United States encouraging law enforcement and the military to shoot American citizens for looting, that's the line.
That's an extremely literal interpretation of his words. Most people would interpret that phrase to mean "you better think twice before looting because I'm not going to sit idly by and let you do it" but in the form of a vaguely threatening, yet catchy rhyme.
Yes, which is better than a reasonable interpretation of his words would show them to be, because going beyond a mere literal reading to consider the deliberate historical reference and the implicit subtext makes the statement worse, not better.
Just yesterday, he retweeted a guy calling for Democrats to die. "Well, not literally of course"... wink wink.
He's really not a mastermind genius playing 4-D Chess. He is openly calling for violence, and has already inspired terrorists to mail bombs to prominent politicians, and people are choosing to play dumb about how evil he is.
People are choosing to grant him deniability even when it is rather implausible because (insofar as race is relevant, there's other things that work similar for some that aren't race-related) they are white racists and his deniability on that point is also their deniability when he is speaking to their interests.