The verse in question indeed existed. It also said white nephites were "fair and delightsome" and darker skinned lamanites were "dark and loathesome" (see https://archive.sltrib.com/article.php?id=50882900&itype=CMSID) but they changed it. Historically, the church has had many racist leaders (Brigham Young's racism was especially egregious), who could be said to just be a product of their times, but if they truly conferred with God, why didn't God correct them?

I was born and raised mormon, and left the church at 25, so I can agree that most members aren't consciously racist, and they do appear to be working to diversify leadership (Gong and Soares). Still, the history is troubling.