But heavy industry is still zoned for sure.
That said, yes, the lack of mixed zoning is one of the more unrealistic parts of city builder games, and one of the most often requested features in the Cities: Skylines community. However, it should be noted that separation of functions is a notion very fundamental to the modernist (1930s–) school of urban planning, and this originated from the entirely reasonable desire to genuinely improve the human condition in cities by separating residential areas from a polluting industry.
Because single-use zoning, together with the ideal of a single-family house for everyone and the use of personal automobiles for transport, turned out to be unsustainable in more ways than one, and because polluting industry is now relegated to a Someone Else’s Problem, mixed use has become (or is becoming) fashionable again, with current ideals and best practices in planning clearly diverging from those of the modernist era.
Another unrealistic idea is, of course, that of a city designed from the ground up, which, although there are indeed real-world examples of fully planned cities, they are very rare. Many players do prefer to start with a tabula rasa in these types of games, and it’s of course much less work for the developers to create maps devoid of existing human population. I, for one, would love to see more maps where the starting point is an existing town, or a group of disjoint villages scattered on the map!
Nb. the notion of planning as a profession emerged in the West mostly during the 19th century, before which cities had, for the most part, grown more or less organically. The need for central planning was in many cases precipitated by fires which could easily destroy neighborhoods or entire towns. Building fire-resistant cities in the era of predominantly wooden buildings necessitated measures such as firewalls between adjacent buildings, streets wider than the alleys of old, and separating neighborhoods with wide, tree-lined esplanades or boulevards. Conveniently, the destruction left by fires also provided the opportunity to realize these measures when rebuilding.
I read the rest of your comment and nodded along approvingly, but I don't have anything else to add other than that I also liked fiddling with existing towns and cities in these games. In SC2k I really loved the scenarios, free-form citybuilding is definitely good but to have a specific constraint and a goal was a really fun challenge.
Those who live in rural areas will be a little bit more familiar- it is not impossible to buy some farm land while working with the local municipality governments to re-zone from agrigultural use to residential use, so that you can build a home there.
The notion that commercial can be split into "light" or "heavy" or that industrial can be split from commercial at all probably isn't something the average person has much awareness of, even intuitively.