When it comes to the Cyrodil/Akavir Interbreding, I tend to think it refers to the Akaviri Humans. Taking their creation myth in mind, and how 'we ate it to become it' seems to refer more to incorporation rather than ingestion, It could very well mean that all Akaviri Humans were slaves/lower-middle class members of the Tsaesci culture.

Serfs, Foot soilders, Merchants, etc. But not (except in rare cases) positions of privelege and/or authority (Commanders, Knights, Land Holders, Royalty etc.)