Entirely depends on case-by-case. Generally, developers can do whatever they want, artistic vision and all that. Both directions are fine, with some things to note. If you're going to "2018-wash" history, then make that clear and don't pretend like that's how it actually was. If you're going to present historical realities as they were, maybe also put a disclaimer about that. It shouldn't be necessary, but too often people call something racist because it depicts the actual racist history. There is no obligation to sugarcoat things for an oversensitive modern audience. Things were shitty, it is perfectly fine to show that. Just don't glorify it.
One negative example to me was Battlefield 1. Heavy marketing focus on the afro-american US soldiers (in US gear), when in reality they were discriminated so much they actually were removed and had to fight under french banner. And instead of putting a disclaimer or something of sorts, they constantly padded themselves on the back for their authenticity and showing so many diverse perspectives (while completely glossing over any central power perspective).