A bunch of big Native American groups condemned him for it. It's just using a popularly-known NA figure as a substitute for one's race/heritage instead of just speaking about it normally, I guess. So they see it as a slur. I could be wrong, but I'd feel uncomfortable going up to a NA person and calling them Pocahontas lol. You can disagree, but the reaction outside the Trump base to him using the word has been pretty bad. Trump's attacked the issue in a way that can further alienate people outside his established supporters, and I really don't see how that's going to be much of a plus for him in a two-way race. Warren at least tried to make Trump give money to a NA charity by proving an amount of ancestry and has made a lot of inroads with those communities that Trump hasn't.
In the end, when talking about the bigger picture, you have to take a more objective look at things. Would it be better if Warren just explained herself better, apologized for ever using that identity, and left it at that? Probably, yeah. But will this really turn NA voters (as a majority) against their interests and move undecided voters to Trump when it's stacked up against Trump's much more numerous scandals (including using a possible slur within this same issue)? Probably not. Generally, it will only be used as ammo for people who weren't gonna switch from team Trump in the first place.