because of in-universe fantasy racism
Can you provide some source on wich you base this asumption?
Bcs as mentioned earlier ... both in this and Goblin topic ... aswell as every else talking about so called "evil races" ... it dont really seems like "in-universe fantasy racism" even exists.

I mean so far we only visited one settlement that can be called somehow civilized ... and that is Druid Grove ... and yet nobody seems to care if you are Tiefling, Drow, or Githyanki!
Besides one short bark (i cant even call it sentence) at the start of conversation. :-/
And when we play as a Deep Gnome ... nobody in Grymforge is trying to enslave us ... they dont even threaten with that prospect as far as i know. O_o
So ... where did you get it?