I wanted a photo of an average-looking older woman and it was unbelievably hard to get it to produce that. And even after some very detailed, emphatic prompts the results still weren't as good as generic stock photo - never mind someone you might see in the real world.
SD believes most women are in their 20s and have big boobs. It's comically obvious if you try to get any fantasy art out of it and you want something that isn't big-boobed porn.
It's a content problem, not a prompt problem. It's been modified since to make it less porn-y but it's still a very long way from supporting straightforward prompt access to the face and body space most humans live in.
So it's a fair criticism to say it's stereotyping. Most of what comes out of it is a white middle class male's idea of what [thing] looks like.
This is inevitable with small training sets. AI is basically data compression. But the lack of awareness that the output comes from a lumpy dumbed down version of the training space is worrying.
It's textbook worse-is-better - narrowing experience and possibility towards flawed mediocrity, with the firm implication no one should have higher expectations. Because that's as good as it gets, and it's fine.