Re: this is going to sound REALLY dumb...
No Bug there.
If you want to use the default races then you use quick start and just choose. The demo doesn't allow you to add existing(open race files) though you can create multiple races to use.
If you want to do mp then you will have to have the other person design the race and then send what they want to you and you create all the player races.
Oh hush, or I'm not going to let you alter social structures on a planetary scale with me anymore. -Doggy!