It's about well written characters. You can do whatever you want and you don't have to justify it to have it exist, just do it well.

Not a AAA game but look at Stardew Valley. Their race, gender, orientation is not their characters, it's a part. They have likes and dislikes, skills and struggles, hobbies, friends etc. The are just little pixel sprites but they have depth that makes them feel way more human.

On the other hand, well animated, voice acted, high res Ubisoft characters feel hollow because they don't bother to go deeper than "dude with sword and diverse friends that mark your map"