I agree that representing a variety of ethnicities does not equal diversity, and that a part of the solution lies in creating different interactions among people of different backgrounds.

However, I think representation fails when we simply create a multi-ethnic monoculture -- that is scramble to find people of different hues who simply uphold the existing white supremacy mythology-based norms. I would also take this sentence: "the goal of diversity in this case should be to teach the Latino student how to relate to non-Latinx faculty and students." and rewrite it to say, "the goal of diversity in this case should be to teach the white faculty member how to meaningfully relate to and teach students of Latinx, Indigenous, Asian, African, and other backgrounds."

Here's an example: My late aunt Phyllis, a white Jewish woman, taught African-American studies at a community college. One day, a young Black man stood up and said, "You have a lot of academic knowledge, but you have NO idea what it's like to live as a Black person." She said, "You know, you're right," and invited him to share leadership. For four years, the two of them team-taught: she from her academic knowledge, and he from his lived experience.

Another example is that a professor friend of mine used to create a welcoming and respectful space for ALL of his students to share and be listened to about what it was actually like to live in their bodies, and what kinds of things they never wanted to hear again. These examples provide a much deeper, broader, richer education for everyone, including the teacher. Your example asks people from historically marginalized groups to adapt to harmful white supremacy mythology-based norms, which teaches no one anything new.