I actually agree with the OP, but i feel this is western developer-itis that larian caught from hirign too many people from the anglo sphere. Trying to make the humanoid NPCs look too "realistic" and kind of forsaking fantasy aesthetics as a result, it doesnt usually work. THo i gotta say BG3 NPCs at least can be attractive and ofthen do work, especialy the githyanki and tieflings, but i admit elves are a strange case.
Another can of worms is the question of ethnicity. Ive said it in another thread , i think larian spent too much time trying to get a diverse cast of actors and thus ended up with very few different actual faces per ethnicity. Thats fine with Humans, but Elves are ultimatley based on a mixture of norse and celtic mythology and its perfectly fine to have them have caucasian features because ultimatley thats what everyone imagiens them like anyway and thus allowing for more variation within that. . I dont think youll find a lot of people that find the dryads from the withcer series fitting for the role they occupy in the setting. its patronizing more so than anything else. This whole thing results in people just picking one and the same face per race, this is most obvious in elves if you ask me. I know that this particular topic is not to be blamed on Larian but on WOTC who think that having 90s style Tokenism will get them the elusive "minority target demographic", which of course it wont, becuase people buy according to their tastes and not according to their skin colour, but good luck telling that to a corporate suit whose had an overdose of california.
That beeing said, the problem with that is easily fixed if you actually allow people to edit those faces. If youve only got one asian face, thats fine if you can edit said face and end up with, gasp, more variation on it. Which is what most tripple A developers do anyway.