One, the entire point of a Pope is a single heir to Christ's position on earth; therefore "regional popes" is not, cannot be, a part of the Holy Roman Catholic Church (what do you think the cardinals, archbishops, etc do? They handle their regions.). Two, the reason the church was so "liberal" when it came to "new" religions & people's was because of church's policy of assimilation by co-opting local religions and traditions in order to "sell" them on the church. (this is Christmas occurs when it does, just one example.)
I would think that without the confrontation of Protestantism, there were be no impetus for a "mass (nice pun) Catholic Reformation"; there would be more suppression of differences (good-bye women's rights, gay marriage, and freedom of religion) because there would no reason to worry about dissention. Protestantism allowed the evolution of freedom to think for ones self in the matter of religion (think about Catholic stance on birth control - and we've got protestants around aplenty!) A requirement for membership to vote or own land would be probable.
I would think what is being suggested is the opposite of what would happen. Catholicism is in and of itself a version of the feudal system and/or the cases system. Whether it's based on skin color, religion (Judaism/Islam rather than Catholic), origins, or your position within society, it will mean a ritualized, institutionalized racism of some form.
A Reformation the point where individuals are allowed the sort of freedom to believe would mean the end of the actual Catholic Church because that WAS what the religious Reformation was about and is the antithesis of the purpose of the Pope. He's supposed to talk with God and tell the people was God thinks on a subject. Protestantism is the region that said man could talk to God without.a Pope or priest to interpret for them.
So, human nature and history are against you on this one. No, it would be more, not less, racist - in the broader implications of the word; that certain people are lessor humans for not being one of the majority/people in power.