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Not sure what you mean by legal arbitrage...and Airbnb has never claimed that it's somehow immune from laws because it's on the web. Fact: Airbnb collects taxes on behalf of governments in cities all over the world, generating over $2 billion dollars in tax money for communities as of the end of 2019...the same taxes collected by hotels. And another fact -- it insures hosts against property damage, and provides substantial protection for guests too.
Court-approved legal arbitrage*
Really good points, OP. What’s good for consumers can be very bad for communities. And that is what we are seeing happening with Airbnb.