Existing races splitting off: impossible, guilds and friends would be ripped apart based on the visuals of their characters.
Third faction with new races: somehow possible, but would require much, much reworking of Azeroth (again), Outland and Northrend to provide enough content for that faction to level up with.

More likely is that they begin to drop the faction barriers, first for instances, then later maybe an "envoy" mode where you can interact with players and NPCs of the other faction, or at least get a "don't KOS" tag.
Let's face it, albeit many people do PvP, the game is PvE at heart. It is not required to have a constant "war" only because the first game in that world, which had little to no backstory or "lore", had this word in the title. Warcraft 3 started to let former enemies become friends or at least allies, and in Vanilla and BC, there was only a very slight Cold War going on, with the only real quarrels being single quests and the battlegrounds.
Speaking of BGs, these of course continue to stay in the game, they already have a somehow inherent "re-enactment" vibe anyway. Arenas and RBGs lift the "Alliance vs Horde" restriction, because in the end, people don't care as much what faction they're fighting against, as long as they're fighting against real players.
PvP doesn't need the "war" backstory from the PvE part. The re-igniting hostilities in WotLK felt too much like they were just a response to the vocal minority, complaining about having to stand next to a Horde/Alliance player in Shattrath without being able to enforce the perceived "red means dead" policy. "Cats and dogs er humans and orcs can't be friends!"
Cataclysm did a better job of explaining the hostilities as ressource/territory conflicts, but it still too often feels like much of the aggression comes from "grah, your race is different/our fathers hated each other!"
I don't expect the Horde and Alliance as a whole to become true allies within the (ingame) timespan of WoW, but it would feel, dunno, "better", like more sophisticated writing if there were more examples "ok, we don't really like each other, and our factions are technically at war, but let's just kill this demon together and then go our own ways again."

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