How much sergeration of races are in your games?

[miniaturehoarder]

Very segregated. PC Tieflings and half orcs are assumed to be among the 10% who can pass for human at a glance with appropriate clothing. Dragonborn are openly tolerated, though barely, in most areas mainly because the Clergy of Bahamut have made great efforts on keeping their clerics and paladins on the move and aiding the people, at great costs to their numbers.

 

[Quartz]

Something I've wanted to try for a while is a milieu where monsters are crossbreeds, the shtick being that a mad god came across the world and spread a magic substance which can make anything breed with anything, and two identical crossbreeds breed true. An orc might be the result of a human breeding with a pig. A dragon might be a cross between a bird and a tree. A giant might be a cross between a human and a tree. An elf the cross between a shrub and a human. And the degree of crossing could vary wildly. In the giant's case you might have a treant or a giant. A centaur might be anything from a horse with four human legs to a human with a horse's head to the classic centaur. And so on. This also allows for things like talking animals. It also means that racial stereotypes go out the window. An orc could just as easily be a paladin as a mage.

 

[Celebrim]

Something I've wanted to try for a while is a milieu where monsters are crossbreeds, the shtick being that a mad god came across the world and spread a magic substance which can make anything breed with anything, and two identical crossbreeds breed true. An orc might be the result of a human breeding with a pig.

Considering that cells, genetics, and so forth are all modern discoveries, the vast majority of mythic settings already assume - as the ancient world's inhabitants must have - that all sorts of crossbreds and hybrids were in fact possible. No magic substance is therefore necessary. The Greek myths feature this theme all the time (probably as part of a general largely world-wide taboo against such relationships). The Minotaur is one such hybrid creature.

It also means that racial stereotypes go out the window.

I don't see how that follows. Animals themselves have racial and mythic stereotypes associated with them, some of them specific to cultures, and some of them broadly cross-cultural. If I say to someone, "Orcs behave like pigs", my meaning will be inferred by a large percentage of hearers. And I'm pretty sure that a statement like, "Orcs are human-pig-dogs.", will be a understood as a very damning statement of their character and the vileness of their nature in just about any language it is translated into. You could of course subvert this, but subverting mythic tropes has to be done carefully. It would make more sense in a fantasy story for all orcs to be as good hearted as they were ugly, than it would be to have a race that is merely ugly but has no archetypal nature.