I think Katseye proved a racially diverse group can work. Katseye seems to be a group more influenced by kpop than western pop. I think there's a market for kpop type of music and promotion on a global scale. I think kpop filled the void of the disappearance of boy/girl groups.
For me I am mainly into kpop because I enjoy the music, so it doesn't matter to me much. Also, there are some kdramas that use non-east and south asian actors. Look at squid games, they featured a south asian man and he was a popular character in the first season.
Personally, I feel this isn't an issue if the music is good. There are other genres of music that featured diversity and it worked out, so I don't see why it should be an issue with kpop.
Here's a thai group for example that features a non-asian member. Based on their views they seemed to be doing quite well.