I've been following this too. I've watched some of the popular YouTubers who are commenting on this (not subscribed to them) and I thought maybe I could offer some insight into this, and particularly why they're wrong...
First, this idea that Sweet Baby is rewriting or censoring games is absurd. The way a contractor like Sweet Baby functions is that it's at the request, of the creative directors present at a studio. It's not some post-production marketing trick where they go in and adjust the script of a game, it just doesn't function like that. These types of services and consultancy work, they get used because the games creative team says 'hey, we want to write a story about a gay black man, but none of us are gay black men, how do we approach that?'
In the industry and in the EDI consulting space, there is this saying 'nothing about us, without us' and this is in part why it's always best practice to include representative stakeholders in your stories and instances of representation. Otherwise, what you create might end up being harmful to those groups of people, and game developers and creatives in my experience do not want that. As I say, this isn't some mandate that comes down on high, game developers are generally very intelligent people and while they want to write about characters and situations outside their own lived experiences, they also recognise the value in including people with lived experience into that.
Sweet Baby isn't the face of this, either. This has moved towards standard practice across media production, and I do believe the 'nothing about us without us' approach is best practice. Sweet Baby is just a consultancy firm in this area which has more eyes on them, most often this work is conducted with individual consultancy and usually this consultancy work is not substantial enough to amount to a credit towards a game (most often a consultancy pass like this might only see someone work on the game for a few days or a week, and usually that isn't substantial enough to constitute a credit, that's a different issue, but that's reality).
In broader media, you have much more matured approaches to this. For instance, Channel 4 in the UK have a 'disability code of portrayal' which outlines the code of practice around how they handle the representation of people with disabilities in their media, including the objective that their media should strive to improve and increase, disability portrayal. Channel 4's example is a good one because they have published this for other organisations to view and use themselves, but most media production organisations, whether they're big games publishers or television production houses, have some similar goals outlined somewhere.
And I think anyone with any sense would acknowledge this as a good thing. If you look at the diversity in games, and in media, it has historically been very poor. Women have very rarely been leading characters, and most often they have been hypersexualised and used to push harmful stereotypes. It's the same in other areas, like disability, for example. Most often, characters with disabilities tend to be either villains, or objects of pity. It's extremely rare that they're empowered playable characters, and when they are, they tend to manifest as some super-powered ability. It's easy to see why game developers benefit from more support and guidance, when seeking to represent disabled characters.
And again, it's not because they're being forced to do so. These elements get into games because game developers want to write interesting stories about interesting characters, and diversity offers an opportunity to do that. So it's almost always the case that these instances of representation are led by people on the development team, and these people are usually creatives.
The other thing I want to speak against is this idea that games are this pure creative process to begin with. At the earliest ideation stages of a product a large production will establish its target audiences and then with a marketing department or a firm like quantic foundry they will most often end up telling you that your target audience is 32 years old male, and likes to be competitive and collecting things (or whatever). Then throughout the development process, user research will put their vision of the game in front of people from this product demographic to steer its design. This can lead to changes to gameplay, narrative and everything else.
I'm not saying this is censorship, either. But what I am saying is that these people like to pretend that speaking to a black consultant about representation is somehow disrupting this pure creative process, preventing the developer's vision for the game getting into the hands of their players. When, in reality, predominantly white male players have always steered the creative process. This is what risk-aversive game development has always looked like and if you're buying games like Suicide Squad you're never going to get that singular, pure creative vision, it's always going to be an amalgamation of thousands of perspectives, and it absolutely makes sense that there is a conscious effort to ensure that some of those perspectives are diverse and that people in minority and underrepresented groups are included in there.
This is especially true, while game development and the industry itself has a race problem, a gender problem, a socioeconomic status problem. Game development itself is not diverse, and the demographics of the people making games do not evenly represent the demographics of the population that they are trying to sell games to. In an ideal world we wouldn't have this social inequality, and we wouldn't need this kind of consultant involvement, but that is not the reality.
I do not think these people are consciously racist, but I do think they are racist. At the end of the day they are acting to preserve what they perceive is their culture, but that culture has been built predominantly by white men, almost exclusively for white men. So it's obviously going to feel like their culture is being attacked when they see it changing, and Sweet Baby Inc is an easy target that they can all point fingers at. I don't think we need to erase the white male protagonist or make every female character unattractive or anything like that, but we want more diverse, even-handed representation and Sweet Baby is an organisation that is emerged to fill that need and desire from the industry. It's not Sweet Baby's existence imposing these perspectives on their studios, it's these studios reaching out to Sweet Baby (and many other avenues) to help them answer questions that they cannot easily answer with their internal resources.
I can't speak to any of Sweet Baby's work, I don't know anyone there, I have never worked with them. However, the demand here comes from the industry itself. It comes from the players playing games and wanting to see more characters that resemble them featured, and from the creatives making games that want to make diverse games without reinforcing harmful stereotypes and prejudice.
The final comment I want to add is even when you recruit a consultancy firm to look at your dialogue, or you get players in to give feedback on the games' story before it's released, I have never seen an instance where you allow that external involvement to have the final say in any design feature. It's always up to the creatives and designers to take that feedback and produce something that the thing is right for their vision of the game. If Forspoken is a bad game (and I'm not saying it is, I haven't played it) it's bad because of the choices the designers made. Regardless of external involvement, they are both responsible and accountable for the creative output. This isn't a book being adjusted after an author has died (which I do not take issue with either provided the original is also preserved), the creatives are always actively involved, and ultimately they determine the final output that players see.
I was just thinking, would this even remotely become Gamersgate 2.0 if it hadn't been posted here. Like I'd have not even known about this and now this is going to be higher in the gaming discourse because of the thread?
Making a disclaimer this isn't an attack on OP but feeding the chuds with fame never ends well.
If we're being honest, it's a certain youtuber/streamer with many millions of subs/followers that's bringing this to the widest audience and taking it beyond the typical bigoted circles. Not this thread on ERA, and yes I do think it's worthwhile that discourse exists that pushes back against the rhetoric.