What's wrong with Kagura's pronunciation of "ka-wa-wi-i"?
Gin: &quot;Not like that! Ka-wa-wi-i!&quot;
Kagura: &quot;Ka-wa-wi-i!&quot;
Gin: &quot;No! Ka-wa-&quot; (here he chokes on his coffee)

Kagura says Ka-wa-wi-n the second time.

If so, though, I'd expect Gin to tell her to drop it rather than say the word from the beginning again.

No one can tell what the writers want Gin to say instead.