Don't make the mistake of thinking that evolution has a direction or goal, certainly assuming that human evolution can be predicted by extrapolating the 'recent' trend is wishfull at best.
It is far more likely that humanity will devolve into a slackjawed, lazy, ultimate consumer of the matrix movies, rather than the hyperintelligent 'grey' everyone assumes is the logical endpoint.
Besides endpoints in evolution are equal to deadends, extinction is always lurking nearby for hyperspecialized (eg ultimately evolved) species.
Offcourse, near-extinction events function like evolutionary bottlenecks or rapids if you will. But then the changed conditions that caused the extinction will put a different set of evolutionary stresses on the species, evolving it into something else.
My on-topic point is: evolution has no role in magically created fantasy critters, besides selecting for survival/growth of populations in the emergent ecologies.
Depending on how/if randomised mythical species are generated, they can be generated in-vitro-sillico as complete species before worldgen or have a pre-worldgen-history evolutionary phase where species are planted (by the devine Toad of Creation) and strife to outcompete eventual competitors.
Successful populations can spread and/or diversify into subspecies unsuccessful ones can dieoff or spontaneously mutate to attempt survival/mimic bottleneck evolution.
I'm not sure on the wisdom of in effect adding an entire new layer of history to worldgen and a tracking layer for n populations of m species with p subspecies.
I think in general evolution is unnessesary, however a short period of titan and overall HFS history/evolution would be good for the continuity of the universal timeline.
It is engraved, that the HFS was driven/locked away by the elder gods, well .... that sounds like fun to emulate.
(heh. Also sounds like a plausible game concept: SlavestoArmok, Prequel. Titanquest. As a Deity of [insert + spheres here], draw species to your cause, grant them mythical powers and defeat Armok and the enslaving deamons so that your chosen people can be free.)