I pick it up sometimes just for the nice scenery. You're right about the giant eldritch serpent thing, but to do that Sonic needs to travel around the world, which means he's going to meet different cultures. Sega didn't want to commit fully so they went with stand-ins that rely heavily on stereotypes. Chun-Nan and Mazuri are the most problematic according to tumblr. Maybe that's the racist thing today? I don't get it either. The fatness part could be from Empire City, which is New York and San Fran rolled into one. There's a fat NPC there that you have to interact with. It is anything but malicious and actually fun character design, in my opinion.

But this is the Sonic fandom, 'nuff said.