The basic idea is that the martial arts are "broken" and not functional in a practical sense.
There is something to this, there are a lot of martial artists with 10+ years training that can't function under full contact conditions in sparring, let alone a "real" fight.
Even within the same "style", you can go to a karate school and find guys that focus on traditional forms and one steps, do non-contact sparring once or twice a month for 10-15 mins and turn away after a solid hit to the face. You can go across the street to a different karate school and find full contact fighters that hit like trucks and won't stop coming forward unless you manage to KO them.
But all that's fine, people train for different reasons.
The only thing wrong with the martial arts is when your training methods don't match up to the goals you are trying to achieve.
It's like anything else. Look at weight training, there is a whole range from body building for aesthetic reasons only, to competitive power lifting, Olympic lifting, functional training for sports all the way to aerobics classes using 3lbs dumbbells. They all use very different methods and get very different results. Not everyone in the martial arts cares about being able to actually fight.