Make mistakes, get messy, etc.
Never had any issues with updating or using it, but it's because I have set up everything myself and never touched AUR. Still nuked it favor on FreeBSD and then NixOS eventually tho.
I love Arch, but it is a demanding mistress. If you get behind on updates, you're asking for pain. Also it can be very disruptive to suddenly get a new major version of Gnome that breaks extensions you used, or applications, etc.
What we instead should say is not that Arch is "unstable" because I agree it's not, but rather that Arch requires a lot more care and feeding and if you don't do that, it can lead to instability
I switched to Gentoo and it fixed all the issues I was encountering with Arch, and was more stable. Now I'm on NixOS, which is far more stable than Arch or Gentoo were.
Now, that said, the way SteamOS uses it, I don't see any issues. With an immutable system, A/B updates, and tested images, the compatibility and update issues are solved. Using flatpak for user applications solves the rest of the noted issues. Would be ideal if I could install with Nix instead of Flatpak, but ran into some trouble there.