Yes, it’s hard to do anything new in fantasy without departing the genre norms and being reclassified as magical realism, sci fi, speculative fiction, weird lit, etc. But really it’s just fantasy without the trappings of the genre.

Some examples:

Jonathan Strange and Mr. Norrell – a absolute banger of a fantasy novel – gets classified as alternate history. Wut?

A Thousand Years of Solitude – wins a nobel prize in literature – oh, that’s definitely not fantasy, right? Except it is…

Book of the New Sun – it’s got all the trappings of an epic fantasy travelog, even the emo main character. Medieval society, magical artifacts, weird and wonderful creatures (the ones that steal memories are so creepy!)… but no elves, and the setting is post-technology, so it’s sci fi. (If you haven’t read it, and enjoy a challenge, this is a serious recommendation.)

The Fifth Season – it and its sequels win three Hugo awards for sci fi (they aren’t that good in my opinion, but I digress) – but the main character is an earthquake wizard, and the whole thing is basically a magic system. No dwarves though…

So if you’re an author and you’re trying to sell a fantasy scenario that just a little off course, you don’t want to stray too far or you end up on another shelf in the bookstore. So we get Shannara and Wheel of Time and Mistborn and Elric of Melniboné and more and more. Some of it is quite good, but all of it is basically fan-fiction for LotR and Conan. Or Dungeons and Dragons, which is itself LotR/Conan inspired.