Arrow's Theorem only considers single-winner systems. But most politics is done by the Parliament, not the President.

There is no need to use small, single-winner voting districts to choose the members of the Parliament. Make voting districts 5-10 times larger and use proportional voting. Arrow's Theorem is not valid for that kind of systems.

Arrow's Theorem only applies to ordinal voting systems.

There are other voting systems that get around this. Kenneth Arrow himself was into non-ordinal voting systems.

Approval voting wasn't considered in that article.

"there is no perfect system" != "no system is any better or worse than any other system"