People complaining that this movie softens the Holocaust misses the whole point of this beautiful story.
The point is not to soften the Holocaust but it's about the dedication and suffering of a father who does everything to protect his son's innocence from the horror of it all.
While sometimes Roberto can be overacting, especially in the first half of the movie where he gets to meet his wife (although it is his way of acting, he's also like that in real life and other movies), the overacting in the second half highlights and possibly makes the horror of this dark period of history hits you even more when put against the playful relationship his character and his son have when compared to more straightforward and realistic movies such as Schindler's list for example.
In simple words, No. This movie does not play down the Holocaust but gives you another way to understand how horrible it was and how important is to help somebody understand that life is beautiful, even in the darkest of times.