'George' was a very autobiographical figure, I think I've read? I really like the easy acceptance of tomboys in Girls' Own and am struck at how much of a regression there seems to have been since.
I think it's a difficult balance - whilst a lot of these things we now recognise as offensive were very much 'of their time', they often also weren't unchallenged in that time. I think we can let authors off too easily with that line.
Something that particularly interests me in Exile is a comment near the beginning, from I think Herr Anserl, that he 'doesn't particularly love Jews' but thinks they ought to be allowed to live their lives like everyone else, and I wonder if that was what EBD thought too, or whether he's being held up as an example of a different but alright position, or a different, not alright but obv far more preferable to Nazi, position; and whether he's being an example of European ambivalence wrt Jews, or if it's just him as an individual character.
I def think these are books I wouldn't want my own child to read alone and uncritically, and if books are republished for a child market I think there's probably justification for removing incidental racism (eg 'working like a n-' - easy to replace with something else). More embedded racism - like EB's golliwogs in Noddy - that's much more difficult. And my feeling is, this isn't great literature - it doesn't warrant preserving, when there's so much more available which isn't shot through with these issues. (And I feel v conflicted saying that, as someone who now, ahem, "collects children's books".)
Otoh, in context the history of racism, and of sexism, can't (and shouldn't) be denied. And I wouldn't want to advocate censoring or somehow sanitising Shakespeare's Shylock, or Dickens' Fagin, for example. The critical thing is the discussing it - and judging that a child is ready to think critically about a book, I suppose.