The title of the post may be a bit much, but this is not about quotas. It is about an interesting time in history.
We all understand that in an earlier time, if black or asian performers auditions for Gypsy or other musicals of that period, they would not seriously be considered.
But Chorus Line cast at a turning point. It actually included black and asian characters, so the question of whether minority dancers were considered for other roles is one many would be curious about. Chicago which premiered the same season cast a black performer as a replacement for a major role created by a white performer.
And to answer your question, Gypsy itself is not racist, but the casting practices of that time usually were. How could they not be, in those pre-civil rights days?