Brown paper dolls do exist and it seems like that may have been the worry. The racism that comes from that isn't always macroagressive .
Yes, there’s been a LONG conversation about - mostly about OC centric games like Mass Effect, Dragon Age and the like - which seems about right as the term was coined by @cassandrashipsit to explain the DA fandom phenomenon of white people making black and brown characters while creating super racist fanworks with said ocs.
Here’s an explanation (very dragon age centric, bit that’s where this whole thing started) and how it’s different from original content (not from fandom):
That’s also why I specifically differentiated me playing by myself in my home and not wanting to touch the default (white) Shepard/Ryder/Lone Wanderer/Sole Survivor/Warden/Hawke/etc vs me making a character from a culture I have no experience in, creating fanworks from it, and expecting Ally Brownie points for it.