I’ve played Dungeons and Dragons for almost 30 years (🤮 I’m feeling old) but I’ve never cared enough about the Forgotten Realms to be bothered by the shifting canon. It’s not that great of a setting in the first place as far as I’m concerned. I don’t see a problem with introducing new races. The more the merrier.

In my personal setting, Sylvan Elves are so saturated with Feywild magic that they can look like whatever the players wants. Fauns, frog people, animated trees, super-dense gasses in a vaguely human shape, anything goes.