@misadventure
So let me start this off by stating that I am aware that this post/point could be, and probably is, coming from a position of Privilege.
With that said...As much as we want to avoid it IRL, Conflict creates Drama, and Drama is what drives the swashbuckling genre. Now, let's set aside the Crescent Empire and Cathay for the moment and solely focus on Thea...
IMO, 7h Sea did a decent job of stripping away the negative conflict between the Nations (i.e. racism/tribalism) and focused purely on the actual political and religious sources of conflict. Castillians don't hate Montaigne just because they're 'French'; they hate Montaigne because they invaded Castille, are lead by a king that openly mocks and oppresses their religion, and other (valid) reasons that have nothing to do with pure tribal rivalry. Similarly, the Vesten loathe their Vendel cousins because the Vendel are committing sacrilege and harming their ancestors with all this renaming of places. Conversely, the Vendel first broke away because the Vesten Jarls were utter d*cks to the farmers that became the middle class, so had minimal investment in a society centered around raiding by a noble class.
The main area of Conflict in 7th Sea that I think is the most problematic is the Vodacce suppression of the Fate Witches. Even then, there is a certain 'maintaining the status quo' logic that makes sense in the setting. I emphasized that because I think this is the key point: separating conduct and 'standards' in the setting from the same in Real Life. The Conflicts in the game are not simply arbitrary.
Again, just my opinion and more than likely coming from a place of Privilege, but I think that something gets lost when only the problematic is focused on. This isn't to say that problematic things shouldn't be identified and called out, or even 'it's only a game...'; the bigger conversation that I don't see often enough is about the potential to change the game world. I'm not talking about a GM altering the canon setting to fit their tableplay and everyone's comfort (which I do endorse). I mean the GM enabling the Players to be agents of positive change in the world.
7th Sea, in particular, is just exploding with the possibility for change. Yeah, the extreme classism of the Montaigne nobility is highly problematic; have the PC's join the Rilasciare and work to overthrow the Nobility and hopefully prevent the Terror that followed the historical events in France. Yes, the Vodacce suppression of women with sorcery is disgusting and wrong; sign up with Sophia's Daughters and start smuggling those women and girls to safety. The setting and the system are set up to let the PC's be the world-changing Big Damn Heroes, if that's what everyone wants. So let them be the BDH's of Thea.
Make the 'ism's work to give the Players things to fight against. Just from my experience, it's far more interesting, satisfying, and cathartic than just steamrolling though another mob of CE Humanoids or stock evil cutouts from central casting.