Hello - - NURBS arcs in Rhino are indeed made as degree 2 but what makes them shaped exactly is the control point weighting. You can ChangeDegree to 3 but these curves will still be rational. (and I am betting, still problematic for MatchSrf in some cases.)
FWIW, I find that if I need a non-rational arc approximation, degree 5 with 6 points per quadrant makes a very close approximation.
-Pascal