Hi anon! You've brought up some really interesting points that I want to add to, and also some I disagree with.
I don't understand what you mean by fantasy racism only appealing to "white" people. Personally, I find that fantasy racism and considering the more negative aspects of a fictional society contributes to the world building, setting, and exploration of characters. It's not just a "plotline" or arc (but some authors may choose to do this), it can be used to comment on society, like how dystopian literature with corrupt governments are used to criticise real world governments.
I get what you mean by white people being able to turn away from fictional discrimination against minorities, while real minorities cannot, and minority struggles being entertainment for white people. But literature tends to reflect reality in some way, aspects of real life will bleed into fiction, people write what they know, or know of.
There is a need in literature, in this case fiction, to incorporate things like racism and discrimination, as it spreads awareness of the subjects, and if handled correctly can be used to inform audiences. If the media doesn't show something, it most likely doesn't exist in people's minds, that's why minorities want (good) representation in modern media.
Also, people might want to write about their experiences of discrimination, through a fantasy lens, as it's easier to digest. It's easier to watch the fire nation keep water nation prisoners of war and kill them, than it is to watch something similar in a documentary of war. Writing about racism isn't a 'white person' thing, many, many POC authors write fiction or non fiction of their own experiences.
Any sensitive topic like discrimination needs to be treated with care in literature, as it is easy to send the wrong message, but that doesn't mean it's not worth writing about. Negative topics in literature aren't inherently bad, the inclusion of fantasy discrimination isn't a bad thing, rather how it is used, and what ends up being said about it (as that could reflect back onto racism in society). The picture of racism, or an equivalent of, that is painted in fiction comes back to how characters react to it, and of course how audiences receive it.
Zootopia was a shitshow, many think Detroit Become Human also is. We still see and know discrimination is bad, but these had some poor execution, and some concerning interpretations.
The Sapphires was a movie that depicted discrimination against Aboriginal people, following a vocal band of girls, there are many scenes of people being racist towards the protagonists. No one's meant to think its a good thing, aside from them antagonising our protagonists, the girls are not happy with their treatment. So it's obvious to the audience that the message about racism is that it's bad.
But you cannot NOT show things like discrimination in literature, cause then people's awareness of real issues goes down. Sometimes the only exposure to minority groups people get is the media, and without it there could be more ignorance and prejudice as a result.
That being said, Jess has not used fantasy racism in the best way. I haven't watched MCD, so most of this is based on my knowledge of MyStreet.
The use of slurs is very weird, and the slurs she chooses are terrible. Looking at the post @the-martyrfication-of-the-matron made on slurs Jess used: "dog", "mutt", and "furry”. If werewolves are meant to represent a minority species in universe (which isn't inherently bad in of itself) then it would be likely derogatory terms would be created against them in cannon. My issue is specifically with "furry". "Dog" and "mutt" are ok, it could be seen as dehumanising werewolves and maybe infantilising of, if you consider words like "pup". "Furry" has meanings: an adjective for something with fur, or the community of people who like anamorphic animals.
I highly doubt the term furry started as a name for werewolves, I think it was just Jess picking dog adjacent words that already exist and using them. If you were to think about it, it would either mean people use the existing term 'furry' as a slur, which is insulting to furries at that point, OR people named a community....a slur. Not good implications at all.
There are moments where discrimination is handled better, like in Starlight where Aaron and the group of werewolves get angry when they are denied entry at a restaurant, and they should be. The discrimination there is clearly meant to be viewed negatively, and I think season 5 is one of the only times Jess handled werewolves well. With characters realising their prejudices, infantilising, and attitudes towards werewolves.
Depicting oppressed people suffering isn't fantasization (necessarily, context could prove otherwise), it could be used to explore a theme, provide social commentary, and critique our world. Of course that's only if authors convey that we as an audience should not like the discrimination depicted.
Here is where Jess screwed up once again. With the very strange babying of werewolves with "fetch" and "sticks" and "balls" and we as an audience cannot tell if this is meant to be viewed positively, as it is very uncomfortable to watch, but no characters react negatively.
Jess' use of meif'wa is horrible. Asking people to nya?? That's on level to asking "you speak X? can you say--" Aphmau asked Kai that in PDH2, and neither Aphmau or Kai think this is weird, Kai nya's for fucks sake.
That's not even getting started on meif'wa being a walking Asian stereotype. I can name 5 with clearly Japanese inspired names, and... the existence of Kawaii-chan.... Similarly, werewolves can be seen as representations of African or Indigenous peoples, which isn't a bad thing by itself, if handled correctly. Jess absolutely did not.
I think that fantasy racism, and discrimination in general is something that can be explored in literature as it can be used to critique such things in our society. Fiction will ALWAYS reflect reality in some way, so fantasy racism will have elements drawn from real racism. What matters is what is being said about the racism, and how it's used in the media source.
Likewise, these are just my thoughts, I am not trying to offend you or invalidate your experiences/ opinion. I am mostly disagreeing with your generalisation of only white people writing and enjoying fantasy racism, and the depiction of such topics meaning the author/audience supports, or is glorifying racism. I would be willing to continue talking about this with you anon, and anyone else.