@RDC Theoretical/rhetorical question:
"Is it acceptable to write a setting where <insert demographic> characters are allowed but due to an authoritarian setting there are existing discriminatory laws about what behavior is or isnt permitted publicly?"
Example: In V for Vendetta (going for movie reference since most people have seen it) there are many references to forbidden love which resulted in acts of heroism that wouldn't have been impactful at all if not for the authoritarian horror of the setting. The toilet-paper written story of the actress with the Scarlet Carsons for example, or another being Dietrich (played by openly out Stephen Fry) heroically taking on the regime despite having a basement full of contraband.
None of these would have been nearly as important to a good story had the setting not been written as something that mushers would find revolting. If V for Vendetta were originally a MUSH, it would have said: "...takes place in an alt-history version of England were homosexuality and non-Anglican religion are outlawed during an era of few civil rights." I think some mushers are distanced enough from their characters to see this as challenging and daring, whereas others would view it as a personal insult.
My stance is that I am not 100% into these "pie in the sky" settings in some cases because it's the challenges of these settings that keep ideas and inspiration fresh.