The translation is funny but the phrasing isn't malicious. Mjesati means to mix or shuffle. So we actually don't call our minced meat after the fact it was minced, it's about mixing several types of meat in the process. Hope this explains it
However the term predates the war and originates in the Socialist Yugoslavia period, if not before. It wasn't common in Sarajevo, because there were seldom "pure" marriages there. In other places where there's a distinct national majority you could hear the words. They carried positive connotations too, although people looking to differentiate used them to differentiate.
Is just Balkan affairs really. Nowadays the sport is called "counting the blood cells". The summary of it would be excluding someone from something due to their origin. Not Croat/Serb thing but actually village X, tribe Y, etc.