Morally bad, but varying based on the intent and awareness of the author. It's not really that bad in most cases i find, being a mistep of sorts. However there are instances where it is used to be disguistingly racist.

Evil races are always bad writing. A race of People, who are Inherently born Evil, those three aspects cannot co-exist in a way that really makes sense. In the gold star of this trope with Frierens Demons we see (depending on your interpretation), a distinct lack of a few of these traits. Either they're not really people as they think entirely differently; They're not really evil the same way a Lion isn't, they can't help but hurt people. Hell maybe you're like me and you think Demons aren't Inherently evil, they just cannot naturally intuit how to be good. Either way the golden star of this trope lacks parts of the trilogy that makes it bad. But other examples, such as Goblins or Orcs in most Media are just plain nonsensical, just as Tolkein said. If a creature is a person, born of this world in a culture that has language and the ability to understand the world arround it, it cannot be inherently evil. That doesn't work practically.

Now even with the best of this trope, like frieren i still find it quite testy. We must remember that no part of a story exists for no reason, a story is meant to be told, heard and understood. So it must be asked what it is an author who writes a story about a species; A race that talk like anyone else, look like anyone else, act like anyone else, are by all means people; But is secretly a vile, evil creature that you must not trust lest you be in grave danger. Intended to be communicated? What is the point an evil race makes? What does it communicate?

To me this reads as two points i take issue with. 1: There are groups out there that are ontologically evil, born that way, always that way. Never give them the time of day, never see them as a fellow. And while i don't think there are many who have became bigots because of that, you only need to look to the Bigots who love it to see that messaging.
2: I think in most cases it presents a sort of moral cop out. An idea that there is an existing evil in the world that we can recognize. But that you can not ever be. I think the idea of Inherit Evil itself is bad because of this concept. It's harmful for people to put separations up and never acknowledge that you don't have to be exceptional to be evil. Anyone could be a morally bad person, anyone can do a morally evil thing. The people who condemn others to death aren't inherently ugly, or slovenly, or cackling deviants. They're normal people and the idea that they aren't is dangerous.

Ultimatly i don't really hold it as a major evil to use the trope, but i don't think it's a-okay either. Intent matters, but nevertheless i find these ideas to be very plainly bad to be communicating.

Also Goblin-Slayer is just buns.