Nothing is more uncomfortable and awkward than sharing a seat with a stranger in extremely close proximity on an overnight journey. No arm rest is one of the factors. Not to mention Covid is still out there.Well, then maybe they should maximize privacy in those seats. Even airplanes have armrests separating passengers. Lack of that on an overnight train is a deal killer for many travelers, especially women.
I don't see the option of allowing passengers to buy two seats as being incompatible with "a government subsidized train service."