Depends on the type of internet connection you’re on. A slower mobile connection will fetch the lossy version at Qobuz if you have set that in the settings of Arc.
Ah! I had there automatically pick best quality.
hmm… Full 5G is not enough?
Edit: this did seem to fix the issue of quality.
So I would say that issue is that it down scale quality too much on auto setting. I did have 5g full connectivity what should be enough.