I do feel as if I've heard about this before.. and a fix.. but I can't find it...
I don't have any Arlo gear... thus I cannot advise you regarding a ST + Arlo config.
For HubConnect, the real devices are on ST and are Selected via the HubConnect app to be sent to HubConnect's server. The server needs to have the Arlo driver available, so that it can build a virtual device on it's end to mirror the ST driver.
The HubConnect-Arlo-Camera universal driver has Motion Sensor built in and it's waiting to mirror a motion event that would come into HubConnect Remote Client running on ST.
It's not easy to read but the 'definition' of an Arlo camera on the ST Remote Client is:
"arlocamera": [driver: "Arlo Camera", selector: "arloProCameras", attr: ["switch", "motion", "sound", "rssi", "battery"]],
...of which: attr: ["switch", "motion", "sound", "rssi", "battery"]], is where Motion is included as a mirrorable (sic) attribute. Thus IF Smartthings were to see a motion event from an Arlo camera, it would be given to HubConnect allowing it to be mirrored to Server.
Because I don't have Arlo, can you tell me if you are seeing Arlo Motion Events in ST Live logging?