I'm not trying to be "PI" or edgy, but I really don't get where the idea of Punch Out being racist came from. Stereotype =/= racist, most Punch Out characters' stereotypical traits are shown to be positive in battle, for example: Don Flamenco's dancing skills let him dodge a punch, Great Tiger uses his magic for unpredictable attacks, e.t.c. - there's no blackface or conical hats (you can play Pro Wrestling for that, now THAT'S a problematic Nintendo game), it's more just a loving jab to other cultures, like siblings mocking one another.
truth be told I'd love to see a British character in a future Punch Out game, as a Brit myself I love the stereotype of Brits as polite tea-lovers who don't care for dental hygiene. (That last part is very true BTW. British teeth are just as horrible IRL as they are on the Simpsons)