I went back and rewatched the stream. When he uses it to turn into a dwarf at 1:41:20 he also unlocks the dwarven racial skill instead of the undead one. He mentions that any race can wear the mask, but I couldn't find the part about him mentioning racial abilities/talents.
The entire idea just seems absurd to me and I'm honestly not too sure what to make of it. Considering that it still requires multiple items (Source orb and face ripper) which don't appear to be early game items I'm not too sure what to think of it. The mask probably won't have a large overall and long-term impact on the game but the notion of unlocking other racial abilities just seems weird to me. idk