Oh it most certainly does, but the choices have to be restricted somehow. For example, WoW wouldn’t be very good if you could type /kill on people, or /setspeed 100000, or give yourself every item.
Because what’s inevitably going to happen is someone realises this and abuses it and everybody else gets bullied and now everybody is using these things and the game basically goes up in smoke.
So you get different abilities, and you get choices to make between those abiliies because the abilities have been crafted within a set of limitations to give compelling decisions.
So, how does all that related to this? Well, it’s simple: Races have racials. If you can change your race as often as you want for a little gold, then people are always going to change race whenever they want to do anything, and the result of that is that our characters will all look more or less the same as one another’s at any given time, but every one of our characters never stays the same.
This removes the sense of personal identity and does severe damage to the community perception because, ironically, making everybody more able to express themselves from moment to moment has caused a situation where noone can.
“Remove racials!” I hear. Okay, what’s next? Free class changes? Remove class abilities?
Nono. I like having my character perceived as a Pandaren permanently, and I like having one of my friend’s characters always being a Night Elf, and another still always being a Dwarf, and so on. It makes the world feel more real.
But yes, the game’s social systems have basically collapsed making this less important than ever, but my answer to that is don’t break it further - find a way to correct it.