WotC is getting rid of half-elves and half-orcs. This is good. They claim they’re doing so to fight racism. This is bad.
Mixed race characters are a cool idea and one that makes a ton of sense in the ever-more metropolitan world of D&D. Back in the mists of the 1970s, being an elf or a dwarf could be a character’s defining trait. That was a sufficiently cool defining trait, and one with enough support in foundational work like Lord of the Rings, that it became common. By the 80s, elf and dwarf had moved from being character classes to the new category of race and could have classes of their own. Gary Gygax hated Lord of the Rings and wanted to play Conan and Elric instead, so he added a bunch of passive aggressive restrictions on so-called demi-human characters to try and discourage them, but it didn’t work.
It was perfectly common for humans, elves, and dwarves to be in the same adventuring party as one another, and because players generally assume that adventurers have a normal experience of the world (which is barking mad, but also comes up with regards to things like the value of money and how many class levels a random bartender has), the assumption was that humans, elves, and dwarves hung out together all the time. Elf-only and dwarf-only kingdoms were still a thing, but major cities were assumed to barely have a human majority with significant demi-human populations. Half-elves, originally added because Elrond is a half-elf and D&D nerds were the kinds of people who knew and cared about this kind of deep Tolkien lore, took on new connotations of not being the result of some rare contact between opposite worlds, but of being a naturally common occurrence anywhere human and elf territories (usually allies in the first place) bordered one another. Half-orcs got added in as a half-measure towards people who thought orcs were cool and wanted to be one without actually adding orcs to the adventurer coalition.
By the 90s, when Drizz’t was rising to fame, rogue members of traditionally evil races started gaining traction, and the popularity of WarCraft II and especially III mainstreamed (within the context of fantasy nerd culture, at least) the idea of shades of grey in your standard elves vs. orcs conflict. This made fewer inroads towards actually adding orcs to the adventurer coalition, probably because the source material still depicted orcs as consistently opposed to humans, just also that their own coalition was an equally valid perspective. It’s probably not a coincidence that this coincided with 3e’s explosion of poorly balanced monster races, with the goal of making just about anything sapient playable.
It didn’t catch on, but considering how well the return to that well went in future editions (especially 5e), it’s probably because the weirdest and hardest to balance races were also given the least attention, seen as an afterthought. Trolls were technically playable, but the balance on them was a nightmare. Their abilities were massively overpowered, and they were smacked hard with level adjustments, which totally failed to solve the problem because while the troll’s natural abilities might make them equivalent to a 6th-level Fighter, a troll with one level of Fighter is not equivalent to a 7th-level Fighter. The abilities you get at 7th level are worth way more than the abilities you get at 1st level. The exact breakpoints for when this monster with that class was hideously under- vs. overpowered varied for every single monster and class, but in general, playing a monster with a level adjustment was a sucker’s game. This prevented the population of the generic D&D city from getting any weirder, but only temporarily. People clearly wanted bizarre races, 3e just failed to deliver.
5e remained as reluctant as ever to include orcs in the player coalition, reserving them for expansion content and giving them otherwise unheard of stat penalties, but petulantly holding out on orcs, specifically, didn’t change the fact that dark elves had fully migrated into the player coalition, along with dragonborn and tieflings, mostly breaking down what few barriers remained to what might be considered a “standard” adventurer race. The infrequent nature of expansion material in 5e also led to the general assumption that it was all core. Whereas earlier editions had new books coming out so frequently that to declare that all of them would be allowed was to invite chaos (which is not necessarily a bad idea because some groups like chaos, but most GMs like to worldbuild and don’t like having the party consist exclusively of expansion races from obscure sourcebooks they don’t own, haven’t read, and never even thought about while building the setting), the slow release of 5e books led to the attitude that books like Xanathar’s Guide to Everything and Tasha’s Cauldron of Everything are effectively core – including Volo’s Guide to Monsters and its drastically expanded list of options for player races.
At this point, it’s assumed that most major D&D cities not only have significant populations of elves, dwarves, dragonborn, and tieflings, but that obscure races like tabaxi and tortles are considered unremarkable even if they’re few enough in number to not show up in demographic breakdowns. So-called “monster races” like goblins and orcs are regarded with, at worst, mild suspicion, and are frequently treated as uncommon-but-unremarkable just like the tortles. Major cities are jampacked with all kinds of bizarre creatures. So it’s becoming simultaneously much harder not to notice that elves and orcs are, for some reason, the only races that breed with humans (and non-human races never breed with one another), and also much, much harder to write stat blocks to change that. The solution of cutting the half-elf and half-orc is the best one – the alternative is to write a system for combining any two races that is begging to be powergamed to death. Add a sidebar saying that mixed characters can pick the stats of one ancestry or the other. This is completely reasonable if you want to keep normal sexual reproduction as a trait of most creatures (personally I favor the “humans have babies, everyone else does something weird” approach, but that’s probably never going to be popular).
But this perfectly reasonable ditching of a legacy mechanic that’s long outdated in the modern hyper-cosmopolitan world of the D&D default is not striking a blow agianst racism. In fact, if it’s a purely narrative decision rather than a mechanical one, it’s actually pro-racist. Not Nazi-grade or anything, but removing mixed-race characters as a mechanical option does add slightly more friction to playing them, and while there are no real half-elves to worry about, there are people who use half-elves to evoke the experience of being, like, half-American half-Mexican or something. You can have a D&D backstory that evokes that same experience while mechanically being either a human or an elf, and you could also have a D&D backstory that evokes that experience by being mixed between two human ethnicities, which obviously provides a better parallel, but in fairness it is a fantasy story and sometimes you want to add an element of the fantastical to the experience.
All this to say that removing half-elves and half-orcs isn’t at all a pro-segregation move if you’re doing it for mechanical reasons, that’s just an acknowledgement that you can’t keep up with the number of potential mixes you’ve introduced with all these new ancestries so you’re giving up and people will just have to fluff stuff. But drawing attention to banning mixed races as a culture war move actually does come across as pro-segregation.
Like, OSR projects are sometimes run by normal people and are sometimes run by racists. If I heard about some obscure OSR project but all I knew about it was some mostly-generic title like “Monsters Down Below” or something, I wouldn’t assume they were racists based on that. And if I heard they weren’t including half-elves and half-orcs, I would default to the charitable assumption that it’s because of the mechanical issues that these imply half-dwarves and half-halflings and half-dwarf/half-elves and so forth, and they didn’t want their race section to sprawl with all these fiddly pairings. But if I heard they made a point of banning half-elves and half-orcs to make a statement on real world race issues, I would at that point guess that yeah, these guys are racists who don’t like having mixed-race characters as part of the default good guy coalition.
The only reason this move comes across as racist is because they went out of their way to frame it as a race thing.