In general, youd typically say that since its a fictional game, it soesnt matter, but in particular, with Genshin, and even more with Mihoyo, it is a problem because of precidence.

Mihoyo had bent over backwards to buff Zhong Li, a fictional deity which just happens to be the representation of a fictional. city that is based off of China. this buff was the only post release buff of its kind due to pressure from the Chinese community, and to this day, has never been power creeped in his respective utility.

Mihoyo has never to this point, has offered their hand to any other region, in fact, quite the opposite. When global servers were going to have exclusive costume content for Honkai Impact 3rd, Chinese netizens complained and even theeatened an employee at knife point, amd they recinded.

take the colorism to the opposite side, and outcry for darker skinned characters liek Dehya did not get buffs because the general Chinese sentiment didnt care.

effectively, there is inherent color racism solely because Mihoyo only listens to the Chinese communities voices, and doesnt listen to voices outside of china.