Some more specific sources on games representing marginalized identities. A continuation on that list of games I showed you.
Splatoon 3: https://www.youtube.com/watch?v=kW4V3sVdigU Hair style is no longer decided by gender, unlike in earlier entries of the game.
Spyro 3: https://www.youtube.com/watch?v=V1V8HZPPoaI Spyro represents ace vibes in one part of the ending cutscenes for the game. For a PS1 game particularly this is important. After seeing Mario saving Peach in another castle for how many so times.
It's one thing to Ubisoft, (or any company under capitalism) if it's just a small few fascist who are racist against their current character choices. But if Ubisoft is risking facing actual legislation in a major market, or a ban. They are going to respond, because they would loss a significant market. They don't want to lose an entire market where they can profit from.
In this case, it isn't really about minorities, is this a little authoritarian, possibly on Japans part, but really, Ubisoft needs this game to profit as best as possible, which is why it can't afford to lose a large market right now. With its low stocks of late, things aren't looking good for the company. They are at risk at being sold off at some point.