That's always at the back of my head nagging me when I see films "based on a true story". I know many of the viewers are going to leave the theatre believing all the events and characters on the big screen are truthfully re-enacted, and during the exciting scenes I find myself distracted wondering if the events really happened, or if they were invented for the film.
I've seen three of these films so far this year.
The Greatest Showman is a musical, so obviously the events in the film were completely different in real life. For one I sincerely doubt the real P. T. Barnum broke into song ever half hour of his waking life. We also realise that his show must have been nothing at all like the song we see all his employees perform together in the film. There were still a lot of scenes presented in the way they could have happened, but I assumed a large amount of artistic freedom even in those.
I, Tonya is the polar opposite, in that it's filmed like a documentary, including interviews with the characters represented as what they might be like today. Many times during the film I found myself thinking along the lines of "they can't possible have been that stupid". During the end credits though they show some real video clips of the people the characters are based on, and it lent more credibility to the events I had seen. When I got home from the theatre I read an article from Vulture that actually presents the film as surprisingly credible.
Den 12. Mann was the one that seemed the most believable. No particular scene seemed especially exaggerated (except maybe how tough the conditions the protagonist survived were). I've read some newspaper articles though that explain that the hunt for the protagonist never actually happened, because the Germans all the while believed him dead.
I enjoyed all three films greatly, and can recommend all of them, but as with with all films "based on a true story" it's best to assume most of it is fiction.
Great additions to the discussion. You're right; any basis in real life is "loose" at best.