It really doesn't. The Law reads
It is an offence if a player touches the ball with their hand/arm when it has made their body unnaturally bigger. A player is considered to have made their body unnaturally bigger when the position of their hand/arm is not a consequence of, or justifiable by, the player’s body movement for that specific situation. By having their hand/arm in such a position, the player takes a risk of their hand/arm being hit by the ball and being penalised.
If the ball hits his arm then the only thing that matters is if it was in an unnatural position. It is nothing to do with an attempt to block the ball. In this particular example I don't have a clue how the ref is supposed to judge it but it certainly isn't a clear error.