You are pretending that no character can be created, outside of the player's ability to interpret it.
There is no pretending about it: if there are no players, there is no character.
[A character] is a real part of that world, by mutual consensus.
It is an idea that is part of another, larger idea. It has no agency, no will (free or otherwise), no consciousness.
When you play a role... [some words about different people being able to play the same character] This is possible because the character exists outside of our playing it.
But it does not exist outside of
someone playing it. And only that part of the character that has been shared with others exists outside of the original player's portrayal of that character. If you
knew that red was Gnoll-slayer Bill's favorite color, but had never shared that with anyone else, then no-one else would know to play Bill that way. And if someone else declared that blue was Bill's favorite color while you were out sick, ("Bill picks the blue pill - it's his favorite color."), they have not "played the role poorly".
Given that this is a role-playing game, poor role-playing should be avoided when possible.
By similar logic:
"RISK is a war game: I should bring a handgun and shoot my opponents; to do otherwise would be poor war-play." Both examples are faulty because first and foremost both RISK and D&D are games, their genre is secondary.
My point is just that the character exists independently from the players. There is a true version of the character, within the collective reality formed by player imagination, and someone playing that character is merely offering their own understanding of that reality...
Characters are not Platonic Ideals. They are not accessible to anyone, only to those with whom they have been shared. If there were one TRUE Gnoll-slayer Bill, then I could have discovered him myself; also, there would be an
objective means of determining which actions and behavior would be appropriate interpretations of TRUE Bill,
without referencing previous interpretations. You could not claim to have "created" Bill - he would simply be.
...I can't say that Gnoll-slayer Bill will choose to spare this one gnoll, which is indistinguishable from every other gnoll he's killed, because I can't honestly tell you that this is the action he would take in that situation. I am merely a lens. I can only tell you what I see.
First of all, this Gnoll is different - it is a PC. Within the scope of the game, that is a relevant, significant difference. PCs are the protagonists, the engine that drives the game-world and the shared experience that we (the real, tangible persons) are there to enjoy. Second, who cares? So what if it were just another monster, some nameless NPC story-bound to cross your path? That Gnoll represents an opportunity, an opportunity for you to prove Bill might be a character capable of growth, capable of becoming something more. That Gnoll represents an opportunity for you to role-play Bill coming face to face with his blind, racial hatred. It could be argued, that to ignore that opportunity, to say "Nah, I'm good with Bill being immutable" is role-playing poorly. Growth is what separates characters from caricatures.
TL : DR - The people playing the game should always discuss and compromise on what types of characters should be allowed at the table. If a given character would be offensive to any of said real people, then the character should not be allowed. If any given character would create a conflict with any other character, the
real people should discuss it and see if there is any way to justify and explain a way for the characters to overcome their differences. Compromise whenever possible. Be excellent to each other whenever possible