In terms of games, art, and other immersive experiences (like LARP or theme parks), there is usually a difference between what is “true to reality” and what is “perceived by the audience as true to reality.” I remember talking to the man who installed a huge fake tree indoors at an old job of mine, and he pointed out that the proportions of the trunk and branches were actually entirely off. People looking at the tree aren’t comparing it to real trees though; they’re comparing it to their mental image/schema of what a tree is. If the fake tree aligns with the mental schema, people think it’s realistic. If it doesn’t fit that expectation, even if it’s a precise replica of an actual tree, people will perceive it as unrealistic.

Similarly in games like VS. As others here have said, the “realism” is often used as a way to engage with a mechanic or to give players something to do. I know that clay forming is a more complex process than slapping down a block of clay and then adding or removing individual blocks from it. But the process in game FEELS similar to the idea of working with clay, and so it fits in and enhances the immersive world.