How much zaniness can you enjoy?
I'm not sure how to answer, tbh. I don't need near as much rational explanation as Eberron goes for. I'd consider Eberron as less gonzo than the "mostly medieval" option.
I guess I'm somewhere in between those, but like...gods absolutely do not need to make any sense at all, because they're gods. I absolutely will not use stats for gods, ever. No power level you can achieve makes you a god while still being capable of being a PC, because gods exist multi-dimensionally and outside of normal reality. Fey are somewhere between gods and mortals, and the supernatural aspects of the world are as supernatural as medieval IRL people imagined them, if not moreso. A place like the titular Labyrinth of the classic movie, including the irrational geometry of the ultimate showdown, are totally possible, but the characters are still affected by gravity.
That all being said, if a character wants to do some rad anime stunt like leaping their full speed off a 40ft high pedestal to slash at the dragon, and then slow or stop their fall by arcing over to another pedastal and jamming their greatsword into it, I'm gonna ask for rolls and let them help us guide the narrative based on the declared actions. And it will probably be epic and rad and make for a great story.
IMO, realism only
really matters when it comes to behavior, and everyday stuff. The town needs a source of water, the townsfolk need to feel realistic in terms of how they live and what they eat and how they behave, etc, but I don't use real world medieval history to determine that beyond inspiration. Food, bathing practices, work, work songs, architecture, common greetings and other phrases, etc, are all carefully in-world and make sense. How far you can jump or throw something? much less important to me.