Feels very silly for them to be calling the more advanced species "sub-human".
You are right on this, after doing some research into this it does feel silly.
I wasn't aware that 'subhuman' has the derogatory tone/ implies inferiority, I thought it just meant "subspecies of human"
The original word is 亜人類, which could also be translated as demi-humans.
With this info, I would change the translation into demi-humans, which lumps the Jevlenese into the same category as mermaids, elves, lizardmen etc.