Min/maxers don't know the rule system 'inside out' because they obsess over the supposedly 'broken' maces over quarterstaffs and approach all rule design and play forgetting one of the fundamental reasons most people play ttrpgs. They consistently miss the forest for the trees. To approach a ttrpg and act like only the 'game' part is what matters misses a huge element in actual game design. That kind of thinking led to the overcomplicated rulesets of the 80s and today.
I think a lot of this stems from prejudice against min/maxers rather than the reality of them. I tend to min/max and when I design stuff I use that understanding to weed out, tone down or rethink stuff that could be abused. I've also run into plenty of min/maxers who also RP and tend to make hybrid min/max RP-focused characters in actual play. That tends to be closer to the reality of most min/maxers than some "always looking for the highest DPS weapon/skill combo" stereotype (which still relies on indepth understanding of the rules regardless).
The fundamentals of why people play also tend to be of little consequence, cuz they tend to have little impact on the rules, and tends to be more ephemeral stuff like "for the stories" or "get together with friends", which is besides the rules. As long as you include enough "cool" stuff and keep things approachable enough mechanically they won't even think about the rules.
But, in the real world, those cities formed quite recently, and the ones in which you can point to someone as mixed tend to have histories of racial prejudice and segragation. Did elves and humans only come in to regular contact in the last couple of centuries? Were orcs a slave race that it was shameful to marry until a few decades ago? If so, then fine, but this kind of structure is necessary for such a clear distinction to make sense.
Which, again, depends on the setting. But most D&D cities aren't just cosmopolitan cities alone, though, even if settings have an unrealistic number of them. There's still elven or dwarven cities, halfling villages, etc in most D&D worlds, and most cosmopolitan cities are still primarily populated by humans. There also used to be instances of racial animosity in D&D worlds until they were whitewashed recently for reasons unmentionable in this forum.
To me another issue is that if there can be half-Elves and half-Orcs why not half-Hobbits and half-Dwarves and half-Gnomes and half-Ogres and half-whatever. It just dilutes the archetypes or more accurately the tropes that these character types are supposed to serve.
Most of those technically exist. Tallfellow Halflings are supposed to be halfling-elves, Stout Halflings are halfling-dwarves (maybe gnomes), Orcs have mixed with everyone since old D&D, they just focused on Orc-Human hybrids as the explicit playable race, Half-Ogres have a Monster Manual entry and have been featured as PC races in some supplements, etc.