I don't think the makers expected most viewers to look at stills like this. Rather than do a lot of almost unnoticeable special effects work on Arnolds arm that would complicate his ability to do his job for the end of the movie, they opted to go in favor of not encumbering the actor. The scenes that bring attention to it had pretty clearly had the proper consideration taken to show the arm was still not covered in skin. HT simply overlooked this.