Sounds like the conclusion is not to do this with arb3 guys because, once arbbed, immediate new status is they are going to FA and you have to count on the player wanting to stay. But Arb2 guys it should work since they always will sign, however, you run the risk of signing a guy a full season early that may take a massive injury.
It is always the idea to wait to sign would-be FA's until end of the year for this reason, and exploiting the arb2 bug is a mile ahead too early. Not sure if it's worth the risk. Unless your guys's little experiments confirm demands go up in the 5th year (by enough) to consider it a saving. It hasn't been my experience it goes up each year, but I'm not 100%.
Keep us posted.