I know many people who watch, I watch myself, and we all know it's semi scripted and that the overall arcs are decided in advance. The really interesting thing about reality tv is once you realise that this is happening, the "Reality" part really comes back into play even stronger because you can see how people react in such situations (the situation being them being part of a scripted reality tv show while wanting to increase their social media following etc). These days there's also the whole component of social media posts and real life events between the seasons that sometimes are more juicy than the show itself, but only get exposed because of the show.
It's just that most people who don't watch, or like to feel smarter than those who watch, think that you just sit there and suspend all belief instead of seeing it for what it is and acknowledging it's pretty interesting.
I don’t see how that differs from any other fiction. Either the whole thing is non fiction, or it’s fictional.
I would even go so far as to label only videos of an event itself, like security recordings, to be non fiction as re-enactments and whatnot can have a lot of extra information that was not there in real life.
I don't think it's a matter of "feeling smarter" (at least not for me); I don't like most reality TV because the things you mention just don't resonate with me as being interesting or worth watching. I don't particularly care how a bunch of "regular people"[0] react in the situation of being fed scripts while wanting to increase their social media following. I don't care about random people I don't know and their "juicy" events. Some people do, and that's fine; it just isn't my cup of tea.
My partner got me into The Challenge early in our relationship. There's a lot about it that I don't like, and it's pretty clear that the competition itself is steered by the production team in ways that aren't really natural, and the outcome week to week is often likely not what would happen if the cast members weren't interfered with. I'm not on social media and don't care what the cast is up to off-screen, and I never watch the "reunion" episode at the end of each season because it's just a bunch of big-personality drama and performances made for internet points. But the show itself can be fun to watch sometimes, and some of the challenges they have to complete are genuinely difficult and cool to watch.
[0] The "regular people" thing is also really blurry. Sure, most (all?) reality shows pull from people who aren't otherwise actors or famous, but being on a long-running reality TV show can create that fame and lead to other (no-reality-TV) acting gigs. (Arguably many of the long-time cast members of The Challenge are celebrities in their own right, with curated public presences, and some of them have since taken on regular non-reality acting roles.)