I'm curious because the Dumner have been enslaving the Argonians forever why would they stop just for an alliance?

Good question.

We are in an Imperial interregnum, meaning that there is no Tamriel wide law on this and each race will pretty much do as they please.
The Dunmer are indeed tradtional slave holders, most notably house Dres and Telvanni.
Also, quite possibly under the terms of the Ebonheart treaty, Black Marsh supplies Morrowind with Argonian slaves.
Morrowind is the most powerful in that block and I see it as an umbrella member, giving protection to the other two in exchange for favourable trade agreements etc.

There may be slaves in the game as NPC's.

I recall there being accounts that argonians frequently actually sold their own kin into slavery. Thus it is a bit ambiguous how much the argonians dislike the dunmer tradition of slavery and how much of it was a plot by the Hist.

Yeah see I hope it's in game but I have a feeling this games going to be very dumbed down to try to keep a "T" rating.

I should note that Morrowind was rated "t" but still included a ton of advlt content that most likely got by due to luck. (slavery, Brothel, Drugs gore etc)

Represented in some form? Yes.
You being able to inflence it? No. How else would the game get a T rating and garner enough foul-mouthed teenagers to support the game?