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Someone clever once said they design campaigns by drawing the lines, and the players had free reign to colour between them.
If I am keen to run a game set in the Fablewood, beggining in the city of Aesop, a campaign world with all animal-headed humanoids (tengu, catfolk, vanara, ratfolk etc) inspired by Mouse Guard, Redwall etc I'd put together a brief outline of what the world is like (Maybe a page max).
I'd put a list of playable races and I'd specifically tell the players: No humans, elfs, halflings, dwarfs.
If a player approached me and said: "I'd really like to play a badgerman, but there's no badgerman stats, can I just use the Dwarf stats instead?"
I'd probably say yes.
If a player approached me and said: "I don't want to play a furry in your campaign setting."
I'd probably tell them that this probably isn't the game for them.
If someone says they are running a game heavily based on classic fantasy authors like Tolkien and Raymond E. Feist, and said that they only want CRB races I'd try to find a hook to make an interesting character with those those restrictions.
To me, restriction breeds creativity, what you leave out is as important as what you put in.
If a GM is running a melting pot world, (like Golarion or Eberron), where everything goes and a player wants to take advantage of the opportunity to play something off the wall (a tiefling, a kobold or what-have-you) and the GM says No it can feel arbitrary.
GM: "I don't like catfolk."
Player: "But I was really looking forward to playing one. I know they're rare in Varisia, but I had an idea that maybe his family joined a Varisian caravan after being shipwrecked years ago."
GM: "Yeah, but you're getting your furry in my traditional fantasy."
Player: "Rick's playing a Tiefling. With cat eyes and tiger stripes."
Work together with the players to determine where the lines are, but try to be accepting of the colours they use. Restriction might breed creativity, but arbitrary restriction just feels mean.