Yeah, it’s kind of confusing. BfA introduced a new system with Allied Races, but Shadowlands is seemingly undoing that by adding subraces into already existing races, like trolls getting a Sandfury skin, and dwarves getting obvious Wildhammer options.
If I was somehow hired to organize WoW races, here’s how I’d do it.
ALLIANCE
Humans: Stormwindian and Kul Tiran “sub-races”. Both would have access to the fat/muscular body types, with the fat one being unlocked only by Kul Tiras rep grind. The voice acting/racials of Kul Tiras would be the defining characteristics, as well as getting shamans and druids.
If you want to go the extra mile, you could give them Stromic, Alteraci, Dalaranian, (unafflicted) Gilnean and (living) Lordaeronian, just giving them different voice acting. Yes, some of these kingdoms are destroyed but there are enough refugees to maybe warrant this as a sub-option.
Dwarves: Bronzebeard & Wildhammer, maybe giving them a few different voices. Then gate the Dark Irons behind rep for the Allied Race option.
Gnomes: Gnome & Mechagnome.
Night Elves: No real sub-races, though maybe Highborne could get their own unique voice acting, and be the only ones to use the mage class.
Draenei: Draenei & Lightforged Draenei.
Worgen: I do actually think they should be distinct because despite being an affliction, it’s what they look like unless they choose to use Two Forms for RP purposes. I hope it wouldn’t be too hard for them to finally implement Night Elf Worgen & Gilnean Worgen.
Pandaren: Tushui Pandaren, not really any subraces.
High Elf: High Elf & Void Elf.
HORDE
Orc: Orgrimmar orc, & the rep-gated Mag’har orc. Maybe add more clan-specific variety if you want to.
Forsaken: No current sub-races, guess it would be easy for other cultural Forsaken to be implemented though like undead night elves, high elves, and gnomes.
Tauren: Bloodhoof tribe (regular) tauren & the gated Highmountain tribe tauren. If you want, add more tribe variety like the Dawnchaser tribe… probably not the Grimtotems though, alas.
Troll: Darkspear Troll, Zandalari Troll, & with the new SL options, Sandfury Troll, Gurubashi Troll, Amani Troll, Drakkari Troll, each with their own voice acting.
Blood Elf: Only them for the Horde-side. If undead elves were ever a thing, they could go here too as a subrace, though.
Goblin: Just Goblins, but maybe add new voice acting for the Steamwheedles as well as Bilgewaters if you want.
Pandaren: Huojin Pandaren.
Nightborne: Given they are a Horde-only race, they should have their own section.
Vulpera: Just Vulpera. They’d make the Horde have one more full option than the Alliance, but, well… that’s kind of how it already is, unfortunately.