This has been happening in media for a while now, infact it's the primary source of actual censorship. Very few people are stubborn and principled enough to take a stand on some "minor" part of the game if they notice it makes things more difficult and people more uncomfortable, especially asians.
Especially if, as if now standing up for that "minor" part whether it's women being good looking, not having blacks/gays ect. is effectively a political stance and you are attacked on a much broader point than the specific thing that's being put into your product.
People always talk about censored this, forced that ruining the game but I believe that bar none the biggest damage being done is opportunity cost, road not taken. I'm certain at this point that there were many, many games that could have been significantly improved or even never came out because of not easily visible stifling effects of this behavior.
For example I remember Vee(sargons buddy) couple of years back interviewing an ex-blizz employee, and the guy basically straight up said that he would draw art for a female character and a woman would walk by (probably some kind of manager or consultant I don't remember) and effectively start questioning him on why he drew it this way or that way and eventually in not so many words tell him to draw the character in a less attractive way. The video was removed later because the blizz guy got cold feet, but I have it saved somewhere I think.
Anyway, think that but multiplied by every level and employee count, then think about all the people who see that encounter and then just silently alter their behavior because they don't want to cause a stir. The scale is truly immense.