It really doesn't. It would be even weirder if it existed hundreds of years after the events of Z where at least a decent portion of the population is descended from Saiyans and Majins and Namekians make up decent sized minority populations too. Plus like Rin said the population of the planet itself is so inherently weird that it would seem hypocritical. As evidence of that Goku and Piccolo were both able to live on Earth for decades or in Piccolo's case technically centuries without anyone even thinking they might be aliens despite Piccolo literally being a green man with antennae and Goku being a kid with a monkey-tail who turned into a giant ape at the full moon.
Considering like half the contestants in the tournament itself are aliens or descended from aliens and the whole crowd was implied to be fine with it it just seems weird, extremely out of place and overly dark and unfitting for the setting. Not sure why you feel the need to shoehorn it in.
and before anyone gets into "But humans on normal Earth are racist towards other humans all the time even though they're all the same species" or something, I'll just remind you all that this is a universe wherein Mr. Popo exists

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and not ONCE does anyone notice that he's basically a massive stereotype that has somehow taken on sentience. The Dark Lord Popo clearly devoured all forms of race or species-ism long ago.