There must be some kind of decision procedure, because you have insisted that the GM is not being arbitrary, they aren't just doing whatever they feel like. "Realism" was given as the decision-procedure, but regardless of whether that is a useful standard (I still don't think it is, but I am leaving that aside), if realism is the decision-procedure, it cannot help the GM distinguish between doing the work to make option A realistic vs doing the work to make option B realistic. Hence, there must be something more to this decision procedure. It doesn't need to be "fixed, hard, universally applicable" anything. It just needs...something else beyond "realism", as almost anything can be made "realistic" by GM effort, doubly so when vast swathes of the world remain forever behind the black box.