Ours fired his off of his nose. This, however, is something that makes no difference in game. What does make a difference in game is this:
Our shooters are shooting with flak jackets, walking incredibly fast, and muzzle climb is a pain.

I'll address each one of these in turn:

Flak jackets are slick, and do not provide a good place to put your weapon. They cover the shoulder pocket that you usually rest your stock on. When I say this is a mild annoyance, that's a gross understatement. Shooting with a flak jacket is an entirely different experience than shooting without one. Even with the mild kick of the M-16, the weapon tends to slide around, and using any sort of muscling causes it to slide off the shoulder, meaning you have to keep a "loose stance" this creates muzzle movement. Now the shooter doesn't actually have bad form. If you watch your muzzle, it actually does exactly what we're taught to do to control the muzzle in a "combat glide." He figure eights. This way, his muzzle is moving, but he knows where it's going.

Movement speed is pretty high in ArmA. I won't address this very much, because Gill already broke down the numbers. I will say that he's moving about 25 percent faster than the average man would be in a combat glide. And for future reference, when I say combat glide, that's what we jarheads use in reference to the civillian "Walking while aiming."

Muzzle climb: Muzzle climb is NOT equivalent in any way to recoil. Recoil is offset by total weight of the weapon and by stance. Muzzle climb is offset by weight on the front of the weapon, dispersion of gas, and stance. The M-16A2 has pitiful compensation for muzzle climb, as does the M-16A4, though the A4 is slightly better. The downside here is that the A4's frontal weight actually comes from wider handgrips, meaning it's more difficult to grip. As well, the grip that you actually use on the M-16 varient rifle is or should be in the slip ring for any degree of consistant accuracy without having to muscle it. Unfortunately for the A4, the larger "slats" as I call them leave a smaller exposed area over the sliprings, so you have to grip the slats. Having fired the majority of the service rifles of the western world post 1900, and a few from before, I'd have to say that if I made a top 5 list of worst muzzle control, the M-16 would head it. For a .22 round, it climbs a ridiculous amount. Even the M-14 and the M-1 offer a quicker target reacquisition.

That said, the sway of the weapon and the muzzle climb while firing moving are completely realistic. Just be thankful that the weapon doesn't actually slip off your shoulder while walking every 15 seconds, as it well should in my military opinion. One more reason why the M-16 is just 8 more pounds of crap.