See PHI13. This was introduced a very, very long time ago in D311 and D312, and I think T168 was the original report.
It prevents arc from being used in some semi-reasonable (maybe?) automation workflows where you're hooking some version of "Land Revision" up to arc land. This isn't necessarily the right approach, but I think the concession here to make this work is small.
Running arc against another copy of arc makes arc unit not work, but we provide a good error message. Most other arc operations still work correctly.
All of these situations are bizarre edge cases but I think we can safely warn and continue here. Even if we revert this behavior later, almost no one should be affected, since this essentially only impacts users developing arc itself.