> By “participate” I think it means “take part”, actively involving for a cause, not just mentioning a topic for educational purposes
I had the same definition in mind for the term "participate". I'm not talking about works that only mention sexism or racism from an offhand remark, there are works that go extensively into detail. To sufficiently tell its story, a game may need to "get down and dirty" with its imagery and scenes. To Kill a Mockingbird had many openly racist quotes and violence stemming from racism. If we strictly enforce the rule that prohibits content that takes part in openly showing racism then we are also banning works like To Kill a Mockingbird.
> It’s clear when a game is just depicting discrimination to tell a personal story, and when a game is presenting sexual abuse for the gratification of the viewers.
You are right that it is clear, but currently, the rule you quoted only prohibits the games from participating in sexism and racism, the rule makes no distinction between depicting this content for the gratification of the viewer and for a different purpose so enforcing it strictly will result in excessive censorship.
I recommend the proposed change to an extensive revision of the rules rather than excessive censorship.