Racial characteristics can be divided into two sections, biological, (mammal/reptilian, body shape etc) and magical, (racial abilities, magical affinities etc)
magical racial characteristics can range from unintrusive, such as an increased affinity for a certain element, to directly and unavoidably having an effect on members of the races lives, such as werewolves going on a magically empowered rampage every full moon,
what they all have in common however, is their reliance on mana, if one were to somehow completely drain all the mana from a member of a magical race, as well as prevent their soul from generating more, all their magical racial characteristics would shut off, with various adverse affects depending on their biologys reliance on mana
Some races (mainly humanoids) can crossbreed, creating a half-breed with the racial characteristics of two races,
However this has multiple downsides, the first is that when a halfbreed has children, their children will always be full-blooded, with the only exception being if the halfbreed has a child with another halfbreed composed of the exact same bloodlines as they are
The second downside is that all magical racial characteristics will be averaged between them, for instance, if a race with 2x fire affinity and half water affinity and a race with 2x water affinity and half fire affinity were to create a half breed, it would have an average affinity for both,
This usually leads to mediocre halfbreeds worse than the sum of their parts
the one exception to this is if both races had abilities that synergize to the point that even when halved is greater than the sum of their parts when combined, such as an ability that increases defense relative to health and an ability that increases health.
The more incompatible two races are biologically, the harder it is for magic to bridge the gap to create halfbreeds, for example,it is much harder for a dwarf and a giant to have a child than an elf and human.