Ref T12464. This is a very old method which let you create a file on the server by referring to data which already existed in another file.
Basically, long ago, arc could say "Do you already have a file with hash X?" and just skip some work if the server did.
arc has not called this method since D13017, in May 2015.
Since it's easy to do so, just make this method pretend that it never has the file. Very old clients will continue to work, since they would expect this response in the common case and continue by uploading data.