Prior to the last 20 years or so, diversity in a fantasy game was the result of the nerdy dudes in the development team cooking absolute heat with their worldbuilding, going into autistic detail. They were made on the understanding that this worldbuilding should ultimately serve the purpose of making the world more rich and interesting.
Modern diversity is a political statement of ideological liberalism. "Why wouldn't there by Chinese people in this fantasy world inspired by the quaint shires of Medieval England, after all, there's Chinese people in England right now!" It's boring. It asserts aggressively that all the NPCs have no differences despite their obvious differences. The black woman will act and think and speak no different to the indian man, they will all just be veneers stapled onto the frame of the same universal human type. It's grey goo.
Diversity is cool as fuck when it's done well, it tells you so much about the world and the people and the culture. To have the Redguard show up in Whiterun and see their vastly different dress and attitude towards the people was interesting and cool.
How is The Elder Scrolls the only fantasy game to do diversity and not piss people off?