First off, remove the arms at the ball joint.
![Image](https://static.seibertron.com/images/toys/uploads/1537180687-p1.jpg)
The problem part is here. It is installed upside down. The flat edge should be facing up and the rounded edge should be facing down.
![Image](https://static.seibertron.com/images/toys/uploads/1537180687-p2.jpg)
You're going to remove those parts and flip them. To start, unsnap the chest at the indicated point:
![Image](https://static.seibertron.com/images/toys/uploads/1537180687-p3.jpg)
From here it's a bit tough. You're going to use force to pry the part out off of the peg. I've done three of these now and I can tell you that you will not stress any parts if you're careful and go one at a time. Once removed, make sure you reinstall them with this orientation:
![Image](https://static.seibertron.com/images/toys/uploads/1537180687-p4.jpg)
Once finished, everything lines up much better and the arms tab in properly in alt mode.
![Image](https://static.seibertron.com/images/toys/uploads/1537180687-p5.jpg)
Also, as IronMagnus said, flipping the Decepticon panel when going into alt mode makes the panels line up much easier.
Video update:
https://twitter.com/ME_Counterpunch/status/1041506823549771777?s=19