On a steering wheel and normal setup (for exemple 540 degree rotation on the wheel) there is a physical limitation on how fast you can turn the wheel. It looks very hard to me to do more than 1080 deg/s. A limit at let's say 300rpm (or less that is 1800 deg/s) would be great for realism. I mean if you play on a game pad you can have such rates that are crazy fast and a real advantage for fast counter steer. Setting the wheel to 30 degrees lock to lock would be around as fast and it is not realistic either.
Limit the AI would also be good.

Not sure about the exact numbers, but I think wheels can reach very high steering speeds too.
However not over large distances, and that is real difference to gamepad. You can give the wheel a strong pull/jerk and for a moment it moves with high speed, but you can not keep that speed for long.
However short, sharp inputs can happen with wheel and it would be wrong/unrealistic to limit them.
Maybe one can come up with more complicated math and conditions: perhaps only limit the steering-speed once the movement lasts longer than certain threshold, but I doubt there is a proper solution for this. Trying to artificially tweak the inputs would always be a compromise, a gamepad can not replicate a wheel.

I think in this situation the realism is up to the hardware and user.
Some players turn FFB low and set rotation low - that is almost like a gamepad.
Some players do the opposite and get wheels with stronger FFB and more rotation or mod their pedals to give more resistance.

Does the "analogue steer smooth" option not do something related, basically limit steering speed by smoothing it?