Yay4SPring - that's exactly it - the changes in 2012 to say that (Harry) doesn't name him but says "other children" ie. not the eldest son of the Prince of Wales - will have option to be a Duke but if female then option of being known as "Lady", but if he only has female children the hereditary aspect dies out with that generation. Says can't change hereditary aspect for females on peerage etc.
So it does deal with Harry and William's children. No doubt, in due course will be applied to William's children in same way. Makes sense to slim down.
It was 2012 that it was decided, so definitely not racism...FGS - Harry having a meltdown as he is clearly upset at not being heir to the throne etc (see his shoving in and out of lines to be seen to be near William etc as his role as "spare" to date has moved to George and the other children of William. Harry is having the same petulant battle that brothers have had throughout history.
So H&M were right, and I think that the backtracking is a way of trying to get the option of Charles now feeling pressurised when he ascends throne to grant that title. However, the original letters patent etc states grandchildren born to a reigning monarch, I can see a case that line of succession has moved so far away by the time Charles is King that the "being born to a reigning monarch" bit is relevant and no case for them to become Prince anyhow.
In any case the 2012 changes cover what will happen to Harry, unless a further change is made. It deals with Harry's potential son becoming a Duke or if only having daughters then the Duke title would cease with that generation. So it seems covered to me.