At this point, the problem has gone away. I’m simply trying to report what happened on 3 different sites. As soon as I deleted the files backed up by ARQ (even though the plugins exclude was in all 3) the problem did not persist.
While I’m not disputing that there is anything new about the ARQ function there are steps in the 9.8 upgrade that I haven’t seen in many upgrades. The first was the need to re-create the Secure .htaccess file and re-enable bulletproof mode for the root and wp-admin folders. The other was the introduction of the PFW Autopilot. I’m not sure why the above described happened but it’s the first upgrade of about half a dozen that I’ve performed on multiple sites where the plugins folder started getting included in the wp-content backup.
Incidentally, I love the PFW autopilot feature. I had pretty much disabled PFW for all my sites because it was such a pain in the rear trying to figure out all the whitelist rules.