I remember back in '09 or so on /tg/ we were laughing about Stormfront threads trying to stat out ethnicities in d20. Now you can hear sphincters clench when someone includes a black NPC in an England-esque fantasy setting.
There's a strong element of escapism in many games. If someone wants to play a tranny halfling, they should be allowed to as long as you don't squick out the rest of the players.
Really, most GMs are big boys and a drop of tumblr in your manual isn't going to ruin anything for anyone. These things can't be enforced. Heaps of groups online eRP with their futa elves and halfling traps because the players never have to make eye contact or hear each other breathe heavily between dice rolls, and hell, let 'em.