I'm sure this will likely meet an entire wall of pushback, but I don't mind. Not having an entire character customization option because of a throwaway line in whatever edition they are up to now's Player Handbook, is dumb. You've enabled cross gender hairstyles. Good. Facial Hair too. Good. You are untangling the differences between lore and limitations, that's a good thing. This is one that should be addressed.
You choosing in your game world to depict every elf as having no facial hair follows along with lore. That's fine and dandy. Restricting Players from an appearance option like this, is nothing more than an annoyance. An impediment to character creation. People that want stereotypical hairless elves could still have them, but give people the blessed option to decide for themselves.
The kind of DM that would restrict my character in this way, for this reason, is the kind that I would have no interest in playing with. It'd be a bad sign of things to come.
