This is a two-part response:
First: As an author, my goal is to form as much immersion and connection with the reader as possible.
Second: As a reader, the more representative the protagonist is of “people like me” the more connection to the story and the more immersive the story is to me.
As an author, I know there are two types of main-line audience I am addressing. First is the role player, the person who creates unique protagonists based on characteristics they choose. For this type of player, a particular customization may, or may not, become important. It depends on the role that their particular protagonist is filling.
The second type of audience I am trying to reach with my writing is those that “self-insert” into an interactive fiction story. The more options I offer to this person, the more connection I form with that reader. Often it does not impact the story itself, but what it does do is strengthen my story’s impact on the reader as a person.
Representation and inclusion is an enormous part of interactive fiction. From the very beginning of the niche genre, it was about empowerment as well as agency.
As a reader, it is important I see romance options that are the same orientation as I am. One of my favorite stories here has no real option to romance a person of my orientation. As much as I love everything else about the story, this one fact is a heartbreaker. What this tells me as a reader, is that me, as a person, is not as valid as another in this story.
As an author, it is vital that my story speaks to, and resonates with, as many of my audience as I can. It is also important to me, personally, to try to improve beyond what was done before.
Things as simple as hair texture, describing skin tone, clothes that are worn, and even tattoos change how well a reader may see the story as being inclusive.
Does this have the same impact in the story as perhaps choosing a profession or background? Depends on the story.
This type of customization can break or even avoid stereotypes and tropes that often are seen in stories across all media. When a person says the protagonist is an elf, a certain “type” is often brought up in a reader’s mind. By allowing different customization options, you can often avoid this “stereotypical” elf from taking hold in a person’s mind.
I’ll give a simple example. Many people, after being told they are playing an elf, will assume the character they are playing will have a bow. If you offer the chance to use a mace, or a pole-arm, it changes the nature of the elf.
You can say, but a different weapon impacts the story… but does it? Most stories in this genre do not go into the details enough that it does.