I think in most cases when you zoom in on one of these admittedly poorly named ‘races’ in D&D, you see the breaking of molds almost more often than not. What they allow is an extreme contrast in behavior being packed into a smaller terrain that isn’t simply viewed as another community by the surrounding people. A bunch of kobolds living in the mountain near your village isn’t seen as having bad neighbors, it’s seen as an infestation. The kobolds, likewise, don’t view the human village the same way they view another kobold settlement. That, in and of itself, highlights some of the problems with an expanding civilization, but it also provides smaller contexts that can clash heavily against one another within the ‘established’ territories of various countries.
You do have many examples in D&D of cities populated by a huge diversity of different types of creatures. Looking at Forgotten Realms, most cities aren’t limited to just humans or just dwarves or elves. Those exist, but they’re not what’s most common. You’ve even got places like Westgate where humans, elves, halfings, and what not are living with orcs, drow, ogres, bugbears, and all sorts of other folks that would typically be attacked on sight in otherwise similar cities.
There’s a lot of nuance and room for nuance in D&D. Even in the case of outer-planar beings like fiends, who are petitioners (dead people living an afterlife) from a plane associated with a particular alignment (evil in this case), there are cases where characters have a major turn-around. I’d say that most of the most popular characters are actually subverting some trope rather than living up to it.