would be vs would have been offended

Sentence No. 1.

Sentence No. 1. The "would be offended" is "the future in the past". The people were actually offended. In sentence number (2) "would have been" implies that the people could have been offended but were not.

If I knew that John would be killed, I would have refused to lend him the car. (implies he was killed)

If I had lent John the car, he would have been killed. (implies he is alive)

As I've mentioned before, correct is often not an accurate word to use when asking about different uses in language.

I'd not look, as I think you are, MsTan, for grammatical reasons for one choice over the other. I'd say that word choice, and therefore, semantics are making the decision here.

2. I don't know why so many people were offended by my remark. If I had known they would have ended up being offended, I would have said 'crying in a helicopter' instead of a BMW.

I'm not completely sure that 'would have been offended" is impossible here, I can't see any grammatical reason to prohibit it, though I'll agree that it isn't as likely.

A: Who would have ever thought that they would actually have been offended.

B: Yeah, for sure. If I had known they would have been offended, I would have said 'crying in a helicopter' instead of a BMW.

In this scenario, the speaker focuses on the past action, "them being offended", while in #1, the focus is more on their state "of being offended".

i would have been offended but i have perfect balance