Yes, if it can't write characters in a story that are racist then it greatly limits what it can do. Same goes for criminal, evil, murderers etc, it greatly limits the creative uses it has for you.
What is left is a tool that is too unreliable to do real work, and too neutered to do most creative work. You can make it write children's stories, but most more mature stories has characters that aren't always nice.
What is left is a tool that is too unreliable to do real work, and too neutered to do most creative work. You can make it write children's stories, but most more mature stories has characters that aren't always nice.