Plot hole: No amusement park ride company would ever produce a prop scythe that was as sharp as depicted in the movie.
Plot hole: At some point during the war games exercise, headquarters would have eventually discovered Sgt. Botnick's body, and then they would have immediately stopped the exercise.
Plot hole: There is no way a military academy wouldn't teach their students the first rule of using a firearm: when you are given a firearm, you must always check if it is loaded and what kind of bullets it has. So there is no way Chucky could have switched the paintball shells with real bullets without someone noticing.
Answer: Military schools usually have gun ranges, so they would have live ammunition for that.
pross79