No Mind Flayer in the SRD?

[Deset Gled]

If your custom race "happens" to have stats identical to the Kuo-Toa, that would be infringement. If you change one small ability or description and leave the rest the same, that would also be infringement. However, if your custom race is partly based on the Kuo-Toa but overall constitutes a new, creative work, then that would not be infringement.

IIRC, you're also allowed to copy a lot more of the original if you're trying to make a parody of the original. In effect, you could make a race that's very much similar to the Kuo-Toa, but only if your flavor text, math, illustrations, etc are written to make fun of WotC.

I always found it funny that the law lets you get away with more if they find you humorous.