The thing that is seriously wrong is that those players showed up to a "Humans only, low fantasy" game when that is clearly not the kind of game they want to play in. It seems you are saying the GM is wrong for offering that.
Honestly, I do get rather angry with what seems like hate towards GMs for providing a game. It's much more satisfying to not get players in the first place, than to get players who just want to mess with you.
I'm saying that the GM is wrong for offering that game to
that group. That's obviously the wrong game for that group. It's no different than me offering to run a SF campaign and the players saying, "No, thanks. Fantasy only.", which actually has happened to me.
At that point, as a GM, what can I really do? I can't force them to play. So, I either find a new group to play my SF campaign or I go to Plan B and run that. Or, I let someone else GM. That works too.
This whole conversation, in my mind, revolves around trust. I polled En World some time ago about their experiences with GM's and about 1/3 had mostly negative experiences with various GM's. So, in a group of 5, presuming that they've all just met, and presuming they're all experienced gamers, probably at least one has had primarily negative experiences with GM's.
So, the GM states, "No X" in my game. The player questions the GM on this. Let's look at this from both sides for a moment.
From the player's side, it's entirely possible that he's had more than a few bad experiences with GM's in the past. And, one trait a lot of bad GM's share is abuse of authority. "Do what I tell you Peasant Player!" is a bad GM. Railroading is a perfect example of abusing GM power. And generally a pretty good sign of a bad GM.
So, the player is now on guard because his experience tells him that this is a warning sign of a bad GM. Not that the GM is a bad GM. It might be perfectly innocent. But, the player's experiences are telling him to be worried.
From the GM's side, it's also entirely possible he's had bad players. And bad players often ask for the moon in order to "win" the game. If you give them and inch, they'll take a mile. So, the GM bans stuff in order to get the game that he thinks will be fun.
And we wind up with this Gordian Knot where neither side, from their own perspectives, is wrong, but neither is actually right either. And it can be a difficult problem.
I've been in Shadzar's position in the past - new groups, new players, all strangers, etc. etc. And it's hard. You try to run a good game, but, there's all these different pressures on the GM because of an inherent lack of trust, mostly because the group is entirely new.
What I learned, and this is how I deal with this, not necessarily the only way to deal with this, is that it's easier to gain trust if you give it first. If I let the player have what he or she wants at the outset, not in any sort of passive agressive way (Heh, you can have it now, but I'm going to SCREW you later), but honestly let that player have what he or she wants, it works best in the long run.
Because once you've stepped back and let the player know that you are willing to trust that the player will behave in such a manner as to result in a good game for everyone, that player will often return that trust. Let the player have his monstrosity if that'll make him happy. Down the road, he'll get better. He'll learn that he doesn't have to "win" at the game.
But, the only way he'll learn that is if you let him learn it. Engage him and the rest of the group in such as way as to draw them into the campaign world so that they become invested, not just in seeing their character succeed, but in seeing the campaign succeed.
