Shaw rejected romanticism and embraced realism. How realistic is Arms and the Man? How much of it is "unrealistic"?
Shaw's Arms and the Man is not realistic, if we define realism as characterized by an attempt to accurately reflect life as it really is. I would agree that is an example of nineteenth century piece bien faite, using an improbable, if charming, romance plot to criticize unrealistic ideas about love and war.
From the beginning, Shaw takes threatening situations and casts them in the least frightening of lights. A deserting solider, Bluntschli, climbs a balcony to hide in a young woman's room. Realistically, this would be very threatening to a young woman, but Shaw casts it in the lightest of tones. The two share a cheerful conversation, full of banter. They begin the process of falling in love.
The play depicts the pitfalls of falling in love with an ideal or concept—a false persona. Raina falls in love with the idea of Sergius as a dashing war hero, and he does the same with her, as Raina is of a suitable class for a man like him. Nevertheless, he prefers Raina's servant, Louka. In a realistic play, this might cause jealousy and heartache, and it would be extremely unlikely that a servant would end up with a man from Sergius's class. In this play, however, that is exactly what happens, and the timely appearance of Bluntschli diverts Raina so that she is not even superficially wounded by Sergius's betrayal.
Likewise, war is criticized for its incompetent execution, false heroics, and waste, but we see nothing of the real agony of warfare. Bluntschli carries chocolate bullets and that, from the start, characterizes the lighthearted way fighting will be depicted in the play.
Shaw uses a comic vehicle to make a point about war and false ideals, delivering his message with the proverbial spoonful of sugar.
This dichotomy really oversimplifies and misrepresents Shaw. Shaw was first and foremost a satirist whose plays tend to debunk popular misperceptions using humor and irony. Thus Arms and the Man is anti-Romantic in terms of its views of war, love, and a certain tradition of war literature, but it achieves its effects through elements of hyperbole, stereotyping, and coincidences, albeit often with surprising twists.
For example, Shaw debunks the notion of the "war hero" in his portrait of Sergius, but the plot twist of the incorrect ammunition is highly improbable. Similarly, an "anti-Romantic" point is argued with Raina's choice of a middle aged Swiss mercenary over the glamorous, handsome young Serb; I am not sure that a real teenage girl would make that choice (at least before discovering the wealth of the Swiss soldier).
Shaw himself admits that he uses much of the scaffolding of the pièce bien faite in creating plots, rather than using a realistic plot structure. The plot of the play is that of a romance in which the two pairs of lovers first are attracted to the wrong people and eventually marry the right people, a structure that is quite conventional and not realistic.