While there are racism issues at play, the recommendation you're making isn't really solving that topic, but you're claiming it is.
Nobody is accusing the concept of sea elves having innate water-breathing, rather than cantrip-based water breathing, of itself being racist.
Your solution doesn't meaningfully address this problem. It just complicates it while breaking with traditions which are not about racism, though there are some traditions which do have racism issues. Sea-Elves being meaningfully different than High Elves in this respect while still all being called types of elves was not the racism issue people were bothered by. You're working hard to solve for the wrong problem, in a manner nobody seems to like to begin with except yourself.