I think this is a question of balance between suspension of disbelief and rule of cool. With a bit of necessary game play and mechanics mixed in.
If an added realism advances the story, enhances the experience it might be good. If it distracts from the core game, or raises consistency problems, that's less good.
Like, if this thing in the game world is so and so, why is this other similar thing in the game world handled so differently. Or, if there is night and day, but it has no consequences, why add it. For realism, or just for fluff. Or is it actually a game mechanic in disguise.
If certain aspects of realism are the core of a game, bringing in other realistic things - just because they are realistic - begs the question where to stop. Will you make the player have the avatar breathe in and out and go on toilet breaks next? There is a thing called feature creep. And I believe it can apply to realism in games.
I played a game called Potion Craft: Alchemist Simulator. It had you physically move your controller in ways to simulate the actions of the devices. Like handling mortar and pestle. Stirring a kettle. That's ... interesting about once or twice for the novelty. After that it's just not fun.
Can making a game too realistic actually make it less fun?
Yes. Not only less fun. It can make a game unplayable. A game is per definition an escape from reality. Bringing too much reality into the game will defeat the purpose at some point.
Where that point is, is different for each player and depends a lot on the genre. A stamp collector simulator game will have different expectations than a business tycoon simulator. But if you introduce the need to go to the toilet in the game as an added realism, both target audiences might give you a confuse look.
If on the other hand you have a game where a mechanic is, that your hero will replenish mana by drinking lots of wine, adding intoxication and the occasional toilet break will be a nod to that mechanic. But most people would probably also accept the suspension of disbelief, that heros do such things offscreen. If the intoxication or the toilet break has negative consequences and there are different means to refill mana, it would add a new complexity to that mechanic. If that is what you want to add, is another question. But if you do not add these things, why bother to call the mana replenisher a wine bottle in the first place. It could be little blue gems floating in the air.