Shapefiles don't support arcs so you will automatically get an n-segmented feature which, if memory serves, is a segment of a 36-sided circle. A featureclass in a gdb supports arc and you can turn off the densification during the construction process
The number of segments seems to be related to the size of the circle - bigger circle, more segments.
then the densification is by distance and not by angle... check to see if the segment lengths are the same for a small vs a large arc
If you have to output to a shape file, use Densify—Help | ArcGIS Desktop first before exporting/saving.