I guess a little Restrictive?
We are playing on the continent of Wildemount in our current campaign. For chargen, players chose a hometown and then picked one of the common races/lineages there -OR- rolled for race/lineage. If they got "Other", they could pick any race that exists in all of Exandria. Still, there are two reasonably diverse adventuring groups: two humans, a tabaxi, a forest gnome, a sea elf, and a blue dragonborn in one group; a wood elf, two humans, a mountain dwarf, a duergar, and a tortle (the only one who rolled "Other") in the second group.
We also imposed a restriction on Named spells (e.g. Tasha's Hideous Laughter, etc). In other words, spellcasters can't just choose them upon level-up. However, there will be opportunities to discover named spells through adventuring or via patrons.
Magic items requiring attunement are also restricted based on the Tier of the PC. For example, Tier One PCs can only attune to common or uncommon items although they do have a 25% chance of attuning to rare items once per level. Etc.
FWIW, I DM for one party (on the Menagerie Coast) and am a player in the other party (in the Greying Wildlands) in the campaign. We all agreed upon these restrictions.
At the end of the day, though, I agree with
@iserith in that a DM who is consistent with their rulings is key to optimizing the play experience.