I've just made a try with a 1.2.5 machine and it seems that the "don't hold arpeggio notes" is the way it has been working until 1.3.7.
maybe we aren't talking about the same type of "hold"? It has definitely been there since 1.2.5-1.3.11. Basically either pressing the "hold" button or using the sustain pedal to hold notes during an arpeggiation so that you can free up your hands for tweaking by leting go of the keyboard and the arpeggiation keeps going. This has DEFINITELY been there for sure since 1.2.x as I used it all the time during improv type takes in the studio.
Should the arpeggio hold the notes or not?
Yes, it needs to work like it did in my description above on all versions prior to v1.3.7
What would be a nice addition is also for it to work like the Jupiter-6 (and maybe the Jupiter-8?). With the Jupiter-6 you are able to use both hands to create a nice complex chord arpeggiation, and then take both hands off the keyboard and press the HOLD button to take over the sustain pedal. Letting go of the sustain pedal causes no effect since the HOLD button has taken over.
Performing the same steps in the same order with the Origin results in the notes being completely released when letting go of the sustain pedal, even though the HOLD button was activated prior to releasing the pedal.
This makes it difficult in a live/jam situation where a musician wants to walk up to the synth, put their foot on the pedal, jam out a quick arppegiation using both hands, then take both hands off the keyboard (still with sustain pedal held) and push HOLD so you can then walk away and tweak some other synth (or pick up a guitar or hand-drum and start playing).