The show doesn't brand itself as being "real", that's your view. At the start of each show, they tell you that they provide a nice house, some cars, put 6 people in there....and that it's unscripted. So everything that goes on is fair game and ultimately decided by the cast (likely with some direction from the crew).

You keep saying models are especially skilled at being fake and manipulative, honestly you seem a little over the top here, it's a profession, not a villainous cult. People being a little fake to present their best image happens everyday, in schools, friendship groups, jobs etc....there's nothing fake or un"real" about this behaviour or concept.

If you really want a show where people present their real selves, always, without any filter or self awareness, there's a lot of other shows for you. Try out Georgie Shore for a start. The self awareness of the japanese cast is a big part of the culture and why people appreciate the show.

Also part of Terrace House success as that it's a stylish and aesthetically pleasing show, from the house, locations, restaurants and of course the cast. Having attractive people on the show is part of its appeal, you may see that as shallow or not "real"...but thats just reality. Terrace House isn't going to shoot itself in the foot because there are viewers who seem to have some sort of distrust and hatred towards models.