So i just racial reincarnated a lvl 22 character and get stucked in korthos.
The racial reincarnation will not create a TR storage, all items will still be in the character inventory.
The racial reincarnation will reset the favor earned character storage.
The items will "overflow".
You must choose an item to skip or end The Grotto.
You can't pick an item, since you inventory is overflowing.
=> Stuck in the Korthos start quest until you throw away enough items to free an inventory slot.
Sorry, but this is BAD and a priority bug to fix.