In general, arbitrage betting is a "blanket statement" used by several casinos, not just Degen, to refer to betting strategies that is prohibited as [if you consult on the next line of the paragraph where arbitrage is mentioned] it ensures winning. The specifics of the violation being breached, that usually got notified by the provider, will be informed to arbitrator once you filed a complaint, as part of their defense and supporting evidence.
But, reading your narrative, I think we can see that you know that you utilize value betting strategy.
Now, given it is not exactly prohibited word-by-word by the casino's ToS and the general consensus of the forum see it as a smart betting strategy, BUT, as they've warned you that further utilization of the said strategy will result in confiscation, I shall suggest you to consider yourself warned and stop to utilize the strategy in Degen.
And further, given the flag was mostly come from their provider, the "label" of value-bettor is now already attached to your marker. The flag follows. So I shall suggest you to stop using the strategy in other casino as well, since sooner or later, the provider will catch up and identify that user xyz on other casino is you, and issue same flag. Other casino might not as lenient as Degen by returning everything on first offense.
I hope that explains everything, if not a lot.
Good explanation, it's interesting how "arbitrage" ends up being a catch-all term even when the rules don't really spell it out. Makes me think reading the sportsbook terms before depositing matters even more for people who bet on value.
Maybe sites should list clear examples of what counts as abuse so players know where the line is?