Would you get jealous and upset if your girlfriend sat next to a guy with their arms sorta wrapped around each other?

Not at all.

It's disappointing how "some" people distrust each other easily while they claim such magical love for each other. By words, full of love, by action, they get to be private detectives.

"Trust" is a very important factor. It's one of the strongest stands on a relationship. And it only has two side. Whether you trust or don't. There's nothing as "sort of trust you but don't do that"

Also, "not everything is the way it seems".

I would wonder why they thought that was a good idea .. Especially right in front of me.  That would seem to be a overt way to try to make me jealous .. And that's tacky and immature.

I'd be upset because she's been basically cuddling with him and not the person she's with.

Well, if that was the behavior she typically exhibited as part of the person I know, it would be fine.

If not, I would probably ask her why she was doing that---either way I would be learning more about her.