I'm only two sessions into my campaign, and one of my players is already well on his way toward earning a free NQ.
Specifically, this character is a Japanese human, and he's been really playing up the racial/ethnic prejudice that's typical of his breed. It's not inappropriate behavior; in fact, there's a lot of historical basis on it, and the player in question happens to be a bit of an otaku, so he's not really doing anything wrong.
In another session or two, if he stays consistent with it, I'm going to be giving him a mid-range Prejudice NQ to reflect this. He won't be getting any free Karma with it, as it's simply reflecting how he's been playing the character -- but it does mean the numbers will come into play, and he'll have to start rolling dice when he wants to avoid confrontations, and he'll have to start taking active steps to get over the bias before I'll allow him to buy it off.
I'm not doing this to penalize him, and I'm going to make sure to talk to him about it when I do it. This player is pretty mature and knows the rules very well, so I don't see any problems arising from it.
Regarding the 'elf poser' thing, I agree with Char. The NQ will only apply as long as the character has the physical mods in place; if he gets himself redesigned to change back, then the NQ will go away. Just point out that you're using the mechanics to reflect first-impression situations, and that he's not going to be stuck with it.
Unless, of course, he starts really taking 'becoming elven' seriously. It can happen.