First off, remove the arms at the ball joint.
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.
You're going to remove those parts and flip them. To start, unsnap the chest at the indicated point:
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:
Once finished, everything lines up much better and the arms tab in properly in alt mode.
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
