The difference is, ARMS is a series that has lukewarm critical and consumer reception. Arms also didn't sell nearly as well as Splatoon...
For a manufacturer like Nintendo, you need either one or the other.
Meanwhile, Splatoon is one of Nintendo's biggest franchises ever, and were in Nintendo's best selling games for the Wii U and the Switch. The only games that have sold better than it are the big juggernauts, the ones with Pokémon, Mario, Zelda, and Animal Crossing on the box. Even then, you could say Splatoon 2 was hampered by a low install base at the time.
And to be quite honest, ARMS doesn't really fit any good niche in Switch's lineup nowadays. I mean, it is a fighting game, where Nintendo has Smash Bros. ARMS was probably a more expensive games than your average Xenoblade of Fire Emblem too. Considering the massive amount of work using and upkeeping an online game is. Also, I seriously doubt that many people are still playing ARMS nowadays. Player metrics and retention are super important for online games, and if I were to hazard a guess, their numbers are probably bleak. Nintendo's other online games like Mariokart, Splatoon 2, Smash, even more obscure games like Mario Tennis Aces, there are no problems getting into a game. With Arms though, last time I tried it, it was incredibly embarrassing. It took like 20 minutes to get into a game.