Is the setting actually high fantasy?! Races.

In a D&D city, you'll see non-human characters walking the streets side by side with humans. Elves, dwarves, dragonborn, goliaths, and more. This is seemingly not the case in Mythic Europe, where everyon is human.

Or is it ?!

I'd suggest that by the rules something comparable should occur in Mythic Europe's cities, due to supernaturally-blooded characters.

The most common, perhaps is Faerie Blood, which has no visible indication. But those with Strong Faerie Blood do have non-human physical features. Their eyes have an unusual vivid color, and they have a "clearly visible" physical feature. Realms of Power: Faerie provides "some common features" of these characters, which may be taken to be descriptions of particularly potent faerie blood.

* Sidhe-blooded characters are tall and fragile, with pale skin, long blond hair, and pointed ears.

* Dwarf-blooded ones are short of stature, with smooth skin like polished stone, and duck's feet.

* Goblin-blooded are short and twisted, hairless, with a long pointed nose, sharp teeth, and red eyes.

* Satyr-blooded are excessively hairy, with a curly beard, goat's horns, cloven hooves, and yellow eyes.

* Undine-blooded have pale, almost-blue skin, webbed hands, large liquid eyes, and green hair.

To these core-rules varieties of faerie blood may be added further ones suggested in Realms of Power: Faerie:

* Brownie-blooded are also short of statue, and look older than they actually are.

* The nymph-blooded (surely relatively common) have dark green hair, pale green skin, and leaf patterns over their body.

* Selkie-blooded or swanmaidens have webbed fingers or feathers in their hair.

* The children of troll-wives, of Ettin-blood, have craggy features, gray knobbly skin, a bulbous nose, and tiny eyes – and avoid direct sunlight.

All these characters often have other Virtues and Flaws that further accentuate their non-humanity, such as having a Small Frame or Giant Blood, bearing a Lesser or Greter Malediction (e.g. sunlight is painful), a Hunchback, Curse of Venus, Enchanted Music, Skinchanger, Greater Immunity to Drowning, and so on.

Some characters instead carry Magical Blood. They have physical abnormalities much like those of Strong Faerie Blood. Animal-blooded characters have wings, scales, gills, teeth, or claws. Those descended from magic humans have an "otherworldly appearance" related to Strength or Stamina (or, rarely, Presence). Those with the blood of a magic spirit or thing has an otherworldly appearance when using their powers – they eyes might turn black, they may rise a foot above the ground, their hair may be blown about by a wind no one else can feel, the skin can become dark with sort and smell like smoke, they may become semi-transparent like water, or so on.

Those with (Magical) Monstrous Blood may have similar physical deformities. The blood of magical animals results in similar, though non-functional, animal body parts. Magic human heritage may result in a dowdy appearance or sickly skin. And those with the blood of a magical thing have a detrimental Lesser Power, though this may not be immediately noticeable.

There are also those with Giant Blood, standing as high as 8 feet tall, head and shoulders above mortal men.

How common is such supernatural blood, how extreme are its visible features, and how accepted are such characters in society? Consider that merely being an Outsider, like a Jew, is considered a Major Flaw and indicates that you are shunned and often persecuted, your life and freedom occasionally being thrown in peril. Yet the above Virtues and Flaws do not carry such a Flaw, even as a recommendation. Realms of Power: Faerie suggests taking the Disfigured Flaw for characters that have such features and are not of strong faerie blood; it is reasonable to apply the same social treatment to those that do have strong faerie blood, too.

This would imply characters with obvious supernatural blood are not respected, and have cruel nicknames, but are largely accepted as part of mundane society. Which would in turn imply that they are not too rare. It would also suggest characters with strong fearie blood likely have only one distinguishing feature, and perhaps in a relatively minor form, rather than the whole appearance depicted in Realms of Power: Faerie and repeated above. Magical and monstrous bloodlines probably have similar levels of acceptance and non-human appearance.

The people in the streets of the city, therefore, might very well include non-humans not unlike D&D. Each such person would have only one distinguishing physical feature, not the whole suite, and while generally disrespected they would still be a part of society, not Outsiders.

Alternatively, you could consider those that bear an obvious supernatural blood to be Outsiders, requiring them to take the corresponding Flaw. This might be more suitable for characters that appear more inhuman, partaking in the above descriptions more fully. This goes beyond the rules, however, and the world they imply.

It perhaps should be noted that there are also people with angelic or demonic blood. Indeed, people with the Blood of the Nephilim might be not entirely rare, and may be added to the above list of the supernaturally blooded

However, those of Strong Angelic Heritage appear to be largely Mythic Companions and actual Nephilim (Divine giants), that the text implies are exceedingly rare. Similarly, those of Demonic Blood appear to be Devil Children, another type of Mythic Companion, and likewise rare.

I think it is a matter of taste, basically. If you want dhampirs and seal-wives and all of that to be common, you can certainly play that way. I'd argue some of the choices that have been offered are too wide for most games. The Blood of the Nephilim, for example, IMO, seems incredibly rare, following the elimination of the Rephaim. God personally hates them and goes to great lengths to kill them off, arguably including the Flood, so the idea that there are six-fingered giants wandering about and the Church has not decided they are more of a problem than the Baltic pagans seems quite forgiving and lenient by their standards.

The one point I'd mention is that these traits seem to fade out of human populations quite quickly. In Cornish stories you sometimes get people who have skin connecting fingers or toes because their mum was a selkie, but I've not seen it pass down more generations except in extreme cases like Melusine and the French royal family. Partially that's because encountering selkies causes a wasting sickness or a desire to throw yourself into the sea, I suppose. There's a story about the people on the Lizard looking weird because they crossbreed with selkies generation after generation after generation.

I'm not certain nymph blood should be common, because at least part of the fantasy of chasing nymphs seems to be that there's sex without consequences. Gods and heroes have children with nymphs, certainly, but, even then, they become a sort of self-limiting class of people with self-destructive curses. The blood needs to thin out because these are origin myths, so, if you think every descendant of Circe has fae blood, that's most of Europe, because her second son by Ulysses is sometimes given as Latinus, the founder of the Latin people, and by a convoluted ancestry, also all of the Britons (although you also need to add some giants and devils there too). The Romans get their genes everywhere in Western Europe.

So, certainly, it's a way of playing a more generic superhuman campaign. For me it loses some of the charm of playing wizards in a mythologised version of Europe, but then again I play faerie cats surprisingly often, so, as I say, it comes down to taste, mostly.

This would imply characters with obvious supernatural blood are not respected, and have cruel nicknames, but are largely accepted as part of mundane society.

I'm not sure this is implied, at least by the rules. The rules for character creation aren't designed to comprehensively and precisely reflect characters' social status in the setting; rather, they're designed to strike a balance between in-setting status, narrative weight and mechanics. In DE, 'a pagan character does not need to have the Pagan Flaw' and so on. If a player designs a nymph-blooded character with green skin and also says they aren't interested in stories about their character being persecuted for their appearance, that's their choice and it's up to the group to talk about what that means in play, but it doesn't necessarily follow that green-skinned people are generally accepted in mundane society throughout Mythic Europe.

That said, I think it's reasonable to expand RoP:F's suggestion and suggest that NPCs with strong visible indications of supernatural heritage who interact with mundane society usually have something like the Outsider and/or Disfigured Flaws (insofar as I'd bother modelling NPCs in those terms anyway).

Interestingly enough, that's the implied reason in DC that people are so tough: due to interbreeding with supernatural and/or alien species throughout history, the "common man" in the DCU is capable of becoming a Mythic Hero, even though they have no specific powers or abilities. This is also the fanon (maybe canon) reason why Batman can beat the crap out of people without accidentally killing them: the entire human population is just that much tougher, due to a species-wide diluted fae/demon/god/alien inheritance. Wizards are a specific breed, though - homo sapiens magus, or something similar.

Bringing it back around to Ars Magica, this could very well be the reason mundane can initiate into magic - ultimately, EVERYONE has got a bit of the farie/demon/magic in them.

You can do a more overt fantasy in ArM, although the more you pile up, the more it becomes Alt Mythic Europe.

It may be that the fantasy peoples are more common than realized, and the ones moving among mortals are either good at blending in, good at disguise, or isolated and inoffensive enough that there's little motivation to trouble them.

In ME, mundane medieval society is likely more tolerant than the modern opinion allows. They know that there are sorcerers and witches, giants, dragons, faeries, and so on, it's just a question of how much attention they bother to pay.

In a High Fantasy Mythic Europe, it becomes more important to have an active Dominion able to protect mundane mortals. Otherwise, why hasn't the (mythic people here) laid waste to / conquered / spoiled / enacted benevolent rulership of the land?

Iirc Between Sand and Sea mentions something like this with blemmyes (magic people), but it is very much portrayed as not a normal thing on a game and is technically outside Mythic Europe.
The default assumption is that those kinds of things are rae (if drawn to safe places such as the Order, regios the like) and most people would neither see them or recognise what they are seeing when they do.