5e Fey Races in Mystara
by JTrithenWotC just came out with some Unearth Arcana mechanics for playing races of the feywild:
These include fairies (sidhe for Mystara), hobgoblins of the feywild, owlfolk, and rabbitfolk.
Of course, the wonderful PC1 (Tall Tales of the Wee Folk supplement comes to mind with this being introduced by Wizards.
Fairy
I would have used 5e eladrin as sidhe in my current 5e Mystara, if any players wanted to play a sidhe.
With these current UA fairy rules, they look fine. I'd kind of want to include invisibility to keep true to the Mystara concept of fey; and I'd probably remove one of those fairy abilities. Mystara's sidhe don't fly, so I'd remove that ability from the 5e fairy. They have a little table for the fairy with some different features, too (some physical, some not); I like this. It matches up with how sidhe in Mystara have different appearances, too. I'd use the table, or at least use it for inspiration.
I think I'd remove the 5e fairy's ability to magically pass through small spaces, if I allowed the invisibility option. Both of those is too much; one could remove the invisibility and keep the fey passage ability, too; I think that would be fine for game balance, and the sidhe would still be "Mystara"-enough. I think the DM should just keep it consistent with all the PC fairies/sidhe, though (not allow some PCs to have it one way and others to have the other ability).
Looking at PC1, sidhe have second sight, breathe water, and iron (continued exposure to it) is poisonous to them. I'd keep these abilities.
Owlfolk
I think these work okay for hsiao. They have some nice features in the 5e Unearthed Arcana mechanics. All of the hsaio would be Medium-size creatures, I think, because I think the hsaio are 4' to 6' tall.
I like their "magic seeing" ability.
Another issue with hsiao, to try and retain their original/true Mystara flavor, is that adult/"regular monster" hsiao have 4 HD.
I've toyed with the idea of using the PC1 mechanic where PCs start at negative levels (as youthful versions of the race) and earn experience to get up to 0 xp where they are then a normal adult (level "0"). I think it could work.
The hsaio also have some attack options; I would keep those, too, probably with the same damage as in the PC1 (it has several amounts, for levels -3 to level "0").
As far as the negative experience levels, I thought I might use that with the mechanics 5e had for centaurs and minotaurs, too, and when they became level 0 (adults/normal monsters), they would be Large in size. That might break some of the 5e balance, but I'm not sure.