The reason these discussions often break down right about here is because the participants have in mind completely different working definitions of “tolerance.”

For example, the social contract comment above assumes an active definition like recognizing others’ personal sovereignty, i.e. their right to act and not be acted upon. To aid understanding, we can represent mutual tolerance between people as a multinational peace treaty between nations. Intolerance is equivalent to one of these nations violating the treaty by attacking another.

Defense or sanction by neighboring states against the aggressor doesn’t violate the treaty further, of course, since it is precisely these deterrents which undergird every treaty. Likewise, condemning and punishing intolerance which threatens the personal sovereignty of others is baseline maintenance for mutual tolerance, because there’s always a jackass who WILL fuck around if you don’t GUARANTEE he will find out.

Conversely, another popular notion of tolerance — the one you may have in mind, as I once did — is a passive definition that amounts to tacit approval of others’ value systems, i.e. relativistic truth, permissive morality, etc.

This kumbaya definition is a strawman originally used by talking heads because, I suspect, it quickly invokes well-worn mid-century tropes, especially for those who grew up in the era, of namby-pamby suckers and morally compromised weaklings which still trigger strong feelings, like disgust and contempt, that reliably drive ratings and engagement. These days the only regular mention of this term is this manufactured paradox using the bad-faith definition, so the original idea is commonly misunderstood.

Pure unlimited tolerance would include tolerating someone's breach of contract, logically speaking.

That "pure, unlimited tolerance" is what they mean by tolerance as a moral standard. Tolerance as a contract is "we have each entered into an agreement to be tolerant of each other. If you are not tolerant of me, you have broken the terms of our agreement, so I will not be tolerant of you."

I don't see a slippery slope here; I'd be interested to hear more about why this is a dangerous road to go down.