I am a 2e fan of FR, and have a fondness of the non-western sub-settings, like: Maztica, Al-Quadim, Kara-Tur, etc. I don't remember them as being particularly racist, that doesn't mean it isn't in there, it's just not what's important to me. What is exactly important to me in those settings? I don't know exactly. Can it be done more tastefully? Probably. But...
While a fan of 2e and 3e FR fluff, I'm not a fan of 4e/5e FR fluff. I thought the 4e rules were technically very good, just didn't feel like D&D. 5e is very straightforward and I would maybe even say, simple, sometimes even too simple... But 5e is what we play now. That said, the 5e setting/fluff books don't interest me in the same way (anymore?) that the 2e/3e setting/fluff books did. I find the FR (adventure) books a lot of Meh! And even stuff I love like Planescape and Spelljammer don't incentivize to buy that, the settings seem washed out. To me it doesn't seem like an advancement, but more like something similar, but maybe a different reality setting that makes less people mad.... Ok, that's fine. But I would fear for a 'new' Kara-Tur in the same line as all the other 5e setting re-releases, that wouldn't jive with what I find enjoyable.
The Paizo attempt of doing a culturally 'sensitive' asian fantasy setting in the pf2e world looked very good from the art and what was being told here:
paizo.com - Community / Paizo Blog
But much of the reported marketing I've seen is less focused on the content and more about the people writing it and do we really need to know when presenting these writers how they like to be identivied as? And when you look some of those writers up, their first (published) writing experience is this setting book
facepalm. I'm still reading through a bunch of new Paizo stuff, but I expect that I'll probably buy the AP, the setting and character book. Which would probably be more then I would say of a potential 5e Kara-Tur book... But I have Kara-Tur books from 2e, but nothing I can think of for Tian-Xia from pf1e or D&D3e... So I'm probably biased. But if other people enjoy it, have fun!
What I don't get is, if this such an issue, why not let these kinds of books be written by people actually living in asian culture instead of Americans that might have asian parents or grandparents? If you are born in America, no matter the skintone, you're American and your perspective is going to be skewed. There are a TON of great and talented Chinese, Korean, Japanese, Indian, etc. (fantasy/fiction) writers, I've read/watched some of those translated works.