The other reason to create something new? The big metaphysical mystery of the Pillars setting has already been solved. I was just reading an author explain that good worldbuilding details are like Chekhov’s gun. You leave them lying around and then later on there’s some payoff when they go bang. With Pillars, many of those guns have already been fired. And they’re the worst possible ones to shoot. I don’t want to know about the origin of the gods or how soul power makes magic work. Explaining these things only detracts from the setting by removing the mysterious and fantastical elements. It’s disenchanted in the most literal sense of the term.
I don't think Sawyer is a right fit for fantasy for this reason.
Even FONV had an air of dry historical narrative to it that worked its way even into Ron Perlman's narration setting up the history of the fight over Hoover Dam.
In that game it worked because of how Sci-Fi and well established the world of Fallout is, but thinking about this, I think he'd be too dry introducing his won historical game. Were I him I'd really turn an eye to the atmosphere Darklands evoked and to find people that could help drown out, or reframe his way of approaching history.
...but the Elder Scrolls is actually much worse about its elves:
And for the humans you have terms like Atmorans and Yokudans for the lore nerds. I don't think Elder Scrolls and PoE are all that different in this respect tbh
TES began as generic from a name/history stand point and then added layers, ironically given the aura of depth to the setting the gameplay lacks where colloquial names for groups exist side by side the stranger, more specific ones much in the way there are common and scientific animal names.
This I think touches on what I said above, where Sawyer's reaction is to give the dry details instead of finding ways to suspend them in a colloquial medium that would allow people to avoid the funny names for everything. To use the before example in an analogy, Sawyer would name a fish Oncorhynchus mykiss and fail to give it a common name like Rainbow Trout.
He could have also gone the route of simplifying things in the way Celtic languages are done with English suited exonyms. Something like this
https://en.wikipedia.org/wiki/Welsh..._English_names_appear_substantially_different is badly needed in PoE.
Oh come on. Fantasy has pilfered from etymology, foreign languages, old mythological names, etc. for its entire history, bringing in plenty of mouthful syllables into common usage. It's not some obscure bullshit deep dive that was totally different from the norm. If Duc or the faux-Italian is such a sin, then surely you blew your skull off at Kara-Tur, which literally contains nations like Koryo (the actual name for a 500-year Korean dynasty that was bastardised by Westerners into "Korea")?
It's such a stupid thing to get worked up over, I don't think anyone would have minded Fampyrs if they were in Arcanum. There's a debate to be had about whether Pillars' effort to blend historical inspiration & the original setting ended up getting into a weird uncanny valley, and there's certainly well worn criticisms about loredumping and all, but listen, there was no magical conspiracy or some unprecedented sinful act going on.
Who handled the names in Arcanum?
It's one newly introduced setting that handled character and location names very well, especially for the fabled villains of the past. Arronax, Kerghen, Gorgoth, Kraka-Tur. All have an element borrowed from generic fantasy or history, yet are changed enough to be new enough not to feel derivative.