Bit late to the party, I know, but…
I have seen cross-nation romance. It was fraught, it was funny, but it did end with a couple of members of our carta (League version of a guild) leaving for Dawn. Orcs cannot (currently, maybe ever) do that though. Orcs are orcs and humans are actual people with souls which can walk the labyrinth. There are no half-orcs (99% sure of that; someone please correct me if I am wrong) because they are two different species who just happen to look vaguely-similar.
Now in-game prejudice… That is not limited to species.
We have Lineage, so people can mock the horns and the gills and the fangs of people who look a bit strange. For the Brass Coast, it’s apparently only Merrow (fish people) who are really not accepted; on the other hand, sending your kids to Urizen just because they have blue skin does seem like some pretty solid prejudice.
Inter-faction prejudice is very normal. Highguard (mirror-shattering low-lives) are a good bet if you want to be viewed with suspicion right now.I’m not sure if the Freeborn have decided the Highborn are not too bad, but the nation was founded by three ‘sisters’ who were getting out of Highguard.
As a player from the League, we have intra-national prejudice. The northern cities smell funny and wear animal furs, for example, so we look down on them a little. Even in the south, there are differing opinions on whether Sarvos is the more elite nation (it is) or whether that title should (wrongly) go to Tassato. If you happen to come from Tassato, of course, you can have great rivalries between those born on either side of the Vassa river.
And all of that is before you get into the Free Companies of the League, who are rival bands of mercenaries and are therefore directly competing for coin!
In the end, my point is that tension comes when you look for it. The Empire is not one happy homogeneous blob, it’s a bunch of scheming nations all trying to get one over on each other. They eye each other suspiciously because they have strange accents, because they have history of eyeing each other suspiciously, because one of them is bright blue, because they value a different virtue. Even the otherwise-tolerant Freeborn…