Generally speaking, the Allied Races are loosely “equals” in terms of what they are:
Kul Tirans = Zandalari: The traditional “new races” for BFA
Void Elves = Nightborne: Races that are effectively “reversed faction” choices
Lightforged Draenei = Highmountain Tauren: Races that are culturally mostly the same, pretty limited on cosmetic options
Dark Iron Dwarves = Mag’har Orcs: Races with more dramatically different customizations than their core race counterparts
Mechagnomes =/= Vulpera: One is both effectively quite literally a brand-new race, the other are just Gnome-amputees that can’t even wear most transmog gear
I argued even before then that Gnolls would’ve made an excellent Alliance candidate, but PARTICULARLY compared to the Vulpera. And with Dragonflight giving them a compelling makeover, I think it’s time to make good on that by adding Gnolls as an Allied Race for the Alliance.
Of course, fair is fair, so something needs to be given to the Horde. But where Gnolls are really more of a direct counterpart to the Vulpera, presumably the Horde should get a similar counterpart to Mechagnomes.
One option that comes to mind might be something along the lines of “Farstriders” becoming their own allied race (maybe more rugged-looking options than traditional Blood Elves, war-paint, etc), or even simply rebranding them as “Wood Elves” with a more nature-centric sub-culture.
To be perfectly frank, though, given just HOW lazy Mechagnomes seem as a race, I’m honestly inclined to just say get rid of them, and simply replace them with Gnolls. Because any “Horde counterpart to Mechagnomes” is either going going to look lazy, or it’s going to look like Blizzard put in more effort on them once again, further instilling the appearance of favoritism.
That may sound harsh, but I’m just being honest. Mechagnomes look REALLY bad, and them being effectively unable to transmog gear just makes things even worse.
Whatever the case, though, I definitely think Gnolls are an excellent candidate for the Alliance.