The problem with this whole debate over "creative liberty" is that this is a two edged sword. If some other company down the road does a different adaptation of the second age and decides to portray dwarves and elves differently then who is "right"? How can they all be correct? The point of cannon is that it is supposed to be the definitive answer on these things so that everyone is following the same blueprint. To argue that in one version it is fine to have characters portrayed one way and then in a different adaptation have them portrayed a different way and both adaptations not being the same as the source material is problematic. At that point it really just becomes a question of whether these are just loose interpretations or true adaptations. That is always the risk with these kinds of changes, especially those with substantial changes, because such changes only belong to the studio making those changes and are not canon to the original story and don't have to be followed by anybody else. And if Amazon can take liberties with this story then so can any other studio which means they all get to make up whatever they want in Tolkiens world, which would result in a wide variation of stories and characters all supposedly in the same world. Tollkien is not the Marvel multiverse and he did not want multifaceted versions of the same characters and stories. He wanted his stories to be true to themselves and any adaptations to honor that intent. Obviously the Tolkien estate and Simon Tolkien have changed that position, which is how you get Amazon claiming to want to "update" Tolkien to represent something it was never intended to represent, as in the "modern world".