There are two things here I would like to discuss. Or, maybe three when I think about it.
1. Yes, the default Mach3 post is producing small lines representing the arch. There are a few settings you can adjust to make it good. First make sure the mesh settings are set according to the help file. These settings you can save in your normal template files so it is a make-once-always-set thing if done right. There is also a tolerance setting in the Tools Dialog. The lower you set it, the better result (and larger file). With that said, it is very high precision G-code coming out of MadCam. I've done cuts where the room temperature affects the tolerance.
2. All 2.5D operations can be transposed to G2/G3 in MadCam, but I strongly believe the Mach3 post is still line based. For older machines it produces a smaller file to process and you can gain some serious speed in modern sturdy machines.
3. BUT, to me this looks like jitter, your machine is simply not beefy enough to cut like this and in worst case you have material building up. You can experiment with cut depth, go shallow and more rounds, keep cooling with alcohol, soap or water mist and make sure to blow off chips. It will probably give you a better result.
Also, are you using an ALU specific cutter? That can make a hyyuge difference.