The following video demonstrates a long standing problem with KSP's arpeggiator implementation.
https://youtu.be/bLcjE0Ih_lkThe problem is that KSP's the arpeggiator will sporadically drop notes when playing. I believe this is triggered by overlapping notes and a poor note priority implementation getting confused about which note it should play. Whatever the underlying cause, it functionally makes the arpeggiator useless for much beyond playing a single pattern or chord, enabling "hold" and leaving it alone. Playing simple synth pop or Euro disco type phrases (for example) with the arpeggiator is highly problematic because it will sporadically drop notes, messing up timing and melodic structure.
More accomplished players may be able to compensate better but for the rest of us the arpeggiator is not currently usable for composition or performance.