Could there be legal reasons for this?
Nah... there's animal sex, there's children killing and even children mutilation, etc.
Not to mention that the player can play as a halfling and get 69ed by Minthara. Also Hellia (a halfling) was in the game at some point and had tons of voice lines, but got scrapped.
They most likely felt restricted by a lot of things because of deadlines, DnD rules and existing lore. Plus it's pretty clear the game suffers from rushed development and is kinda still in Early Access stages due to thousands and thousands of bugs being fixed every single patch and lots of in-game story missing or not working or feeling disconnected, which is slowly being fleshed out.