I just installed VScode and by default, when I chose the language as Ruby, the file is saved as .arb. I only know about Ruby files with .rb. They seem to both run fine on VScode but I can't tell what is the purpose of choosing one over the other, and why VScode defaults to .arb instead.
.arb is the default file extensions for Arbre, a Ruby DSL for defining HTML views in Ruby instead of HTML or a templating language like ERb, Mustache, Liquid, or HAML.
As to why the author of the extension you are using thought it should be the default file extension, that is a question that only the author of that extension can answer. If I had to guess, I would say it's simply because it is lexicographically first.
Note that on almost all Operating Systems, file extensions are completely irrelevant. The only exceptions I know of are DOS and Windows.