I actually think Lily being Mal’s child was their plan all along. I brought this up in another thread, but I have a feeling this biblical quote is where they got the name: “Like a lily among the thorns, So is my darling among the maidens.”
Source: http://biblehub.com/songs/2-2.htm
Cmon, lily among the “thorns”? An obvious connection to Maleficent. As for why they cast a latina as young Lily in the first place, they probably wanted a dark haired girl to parallel Regina during “Breaking Glass”, rather than casting her because Nicole Munoz is latina. But it doesn’t make sense when Maleficent is clearly not latina. Nicole Munoz appears to be a white latina, so the race thing might not have been accounted for when casting the adult Lily. I could buy Agnes Bruckner playing Maleficent’s daughter, but it’s harder to swallow that Nicole Munoz grew up to look like Agnes Bruckner. In the end, it was probably an oversight rather than blatant whitewashing. Doesn’t excuse it by any means, but sigh.