Are they keeping the word race for wood elves et al? I hadn't heard that.

How can you have two species interbreed? Magic.

To my mind it's a improvement because 'racism' has come to mean racial discrimination and not "the belief that the human race is divided into different species or subspecies". And, from an anti-racist perspective, I hate that it has done so. When we lose the original meaning we don't understand why some ideas being promoted by racist (in both terms) medical doctors and geneticists are deeply problematic . . .

But I digress . . .

In DnD 'race' has always meant species and this change just clarifies that. Do I wish that they had kept to half elves and half orcs? Yes. Does it ruin the game? No.