(Includes spoiler about a certain prominent mind flayer and his former friends. You know who)

Larians Mind Flayer lore makes no sense. Lets start with Larians revelation that they have no soul.

Why? All living things have a soul. Thats the definition of living. If you do not have a soul but still move you are either a construct or undead. The entire process of becoming a lich revolves around removing your soul and storing it in an object.
But mind flayer are obviously neither of those as no anti-undead ability works on them.

It gets even stranger when you consider that even mind flayers have deities, which follow the normal rules for them including providing an afterlive for the souls of the deceased. Except apparently not? They must have a lot of free time.

But ok, lets roll with it. What are the effects of having no soul? Mainly that you cant be raised from the dead. Can't return a soul when there is none in the first place.
Which also means that the soul of the host is free to return.

Which brings us to the embodiment of Larians failure, the Emperor.
When the soul is gone it means that the host is dead. Which matches D&D lore. The tadpole doesn't transform you, it eats and bursts out of you xenomorph style. And that is no well guarded secret, people with knowledge about mind flayer ecology would know that.

And that makes the story of the Emperor very unbelievable. Starting with Ansur. Why would he even try to "heal" the Emperor when its a completely different being instead of ressurecting Balduran? Why even put up with a mind flayer in the first place? (And how a single mind flayer is supposed to solo a adult dragon remains a mystery. The Emperor certainly sucks against Orpheus Guard.)

And the big problem is that as a new being the mind flayer would have its own personality and memories. It might choose to absorb bits and pieces from its host, but it is its own person.
Yet Larians "story" depends on all of that being thrown out of the window despite even referenced in the game a few times of the tadpole eating away your brain and that instead mind flayers retain the personality and memories of their host completely. Not only in case of of the Emperor, but also in the ending choice when freeing Orpheus.
Because if mind flayers are their own person, how can you even know that the flayer created by you or Orpheus would even want to stop the brain or would be able to (ignoring for now that Orpheus can turn into a mind flayer without a tadpole as by this point Larian stopped to even try to present a coherent story).
This goes even so far that the mind flayer/former tadpole could commit suicide because its a mind flayer. Why? How?

Tl;dr
Larians mind flayer lore makes no sense and heavily clashes with D&D lore imo just because they wanted to shoehorn the Emperor in.