This has always been evident with both Bannon and Trump. The issue with them isn't their personal racism, but their willingness to manipulate people by validating their worst instincts. Everyone has been played for a sucker in an administration that's been short on either policy or ideology since the campaign.
That's actually what makes this administration so dangerous. Not who they are, but what they're willing to do. They're not fascists. They're nihilists.
Worth tagging to this line of thinking/framing: it's easy to celebrate Bannon's firing prematurely if you're against nihilism.
Bannon appears always to have been a puppet of Roger Stone, cherry picked to gain/increase/cement the support of the "alt right" by Stone late in Trump's campaign.
Stone is the constant.
Building a base from a substructure of White Nationalism is Stone's play, and Bannon was Stone's play. Stone has been on the Goldwater "Southern Strategy" train since he was like 7 years old or something. IMO he doesn't necessarily believe in it per se (i.e. as a white supremacist), either, only in its power to drive and divide people. He doesn't believe in anything except taking pleasure in manipulating others, and having the ability to control powerful people and masses of (in his mind) serfs.
Anybody who hasn't seen "Get Me Roger Stone" on Netflix should check it out. Seeing is believing. It elucidates a lot of weird, confusing shit that becomes a lot less confusing once you see Stone interacting with Alex Jones, what Stone's background & motivations are, etc.
Most interesting thing about it is that Stone clearly was laying the foundation to bring Trump down, as he pleases, long before the election was won. He was explicitly stating he had been in contact with Russian hackers, in the interest of getting dirt on Clinton, long before anybody was thinking about Russian interference in the election (as a legal/criminal issue) and questions of treasonous activity. He knew exactly what he was doing.
Stone is (appears to be, from the docu) a psychopath who gets his kicks from turning the US political scene into a grand scale puppet show that puts him at the strings. He probably wakes up each morning thinking about whether now is the time to start pulling the ground out from under Trump, just tickled to death that he has all the cards to do it, or not do it, at his whim.