Why are my characters raising their arms when slowing down?

You probably did not provide a neutral motion (0m/s, no turn) in your Locomotion Behavior.

Golaem Crowd hence create one for you, based on the default pose (usually T-Pose) and mix it with your other motions when the characters are near stopping.

You should either provide a rest motion or uncheck the "create neutral animation if needed" in the Locomotion Attributes.