"Character arc" tracks the changing status and viewpoint of the character over the course of the story, and does not imply transition between opposing states. Going from evil to good is an arc, sure. But so is going from evil to Even More Evil.
All that you need for an arc is for the character to go somewhere - and further along a given path is still somewhere. So, typical games restrict possible arcs, but that's not the same as not having any arc at all.
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"Character arc" tracks the changing status and viewpoint of the character over the course of the story, and does not imply transition between opposing states. Going from evil to good is an arc, sure. But so is going from evil to Even More Evil.
All that you need for an arc is for the character to go somewhere - and further along a given path is still somewhere. So, typical games restrict possible arcs, but that's not the same as not having any arc at all.