It wasn't staged, but it wasn't NOT staged
-Spoilers-
I've been on a reality TV competition set (America's Got Talent filming) and I have a good friend who is currently on reality TV. I see there are a lot of opinions going around, everyone strongly believing it's all staged or that it's not at all.
Well, it IS "reality" and all "reality" I have been apart of or heard about ever has been the same so I am 100% sure this is no different.
What they do is they go through with the stunts and they make sure to get the REAL reactions of REAL people. That is key. Then, if a car was going by during dialogue or a hair was out of place or a line wasn't delivered as they wanted it to be, they will reshoot it.
The best example I can think of is the pageant scene. Those reactions from the crowd were real. And once it was all caught on tape, they came out to calm the crowd and tell them it was all a joke for a movie (just as was shown in the credits). But let's say the little actor boy blanked and messed up some of his dance. Well, then they'd say "hey can we go back out there and reshoot his dance?" so in the end, the dance we saw may have not been the same exact one that the audience was reacting to.
Also, it would have been impossible and probably illegal for them to set up cameras in all of those places so likely the owners of the business knew but to make sure that the reactions were as genuine as possible, the ONLY people that knew were the owners of the building who aren't even in the film. The workers were not informed. The owners would agree to this for some extra cash as well as the publicity. They also would have had to get permits and inform the police.
Then there's the other aspect where let's say a real person says something hilarious but they didn't catch it in time because of a malfunction or a car going by or something. Then, after the reveal is done, they go back and say "hey we loved what you said there can you say it again, just like that?"
So it's really just "altered reality". Far more genuine and real than a scripted movie but it's not like they just had handy cam and caught whatever they could on tape and threw it together. It was well planned, thought out, and orchestrated.