This! I can resonate with all of your points. But this one is one of their major weaknesses.
If this is what happens in your feed, you have a shallower and less genuine set of social media connections than I do. I get highlights, sure, but just as much lowlights, and quotidian events that don't meet either description.
I suspect that the people who connect with networks of people who do exclusive self-image-burnishing social media posts would also connect with people that provide the same kind of fronts in other venues (including in-person), though I'll also grant that if you tend to connect predominantly with such people, social media magnifies their effect, as it's easier to consistently present an image online than in person.)
I don't think you have to be "shallow" to be biased towards posting highlights.
You spend a nice vacation in Asia? Your kid managed an important accomplishment? Found a restaurant that's awesome? Aren't these the kind of things that you naturally have the tendency to share?
In contrast, you spent your saturday doing nothing at home? Your kid did an average thing? You ate food that's just "okay"? Am I shallow if I don't like posting these things? Sure some of the days I might want to post about some average or bad things, but I think I'm still biased towards the highlights
A. I don't care what 95% of people I am connected with are doing, and I regularly talk to the people I care about anyway.
B. I can't have any meaningful discussions on them
C. They are dominated by high volume posters who tend to be very opinionated. Very opinionated people tend to have extreme opinions which are usually wrong and aren't particularly interesting to me.
D. The networks present a false sense of reality which lowers happiness. Everyone always posts their highlight reel which makes you feel like the whole world is killing it constantly and you aren't.