Claudius I don’t know about that. I think Arteta is just very dogmatic about what he wants - very specific style.
Well exactly. To an eye other than Arteta's, Pépé generally looked like a player who was capable of contributing and one whose work off the ball improved over time, and that after public criticism nearly as harsh as ten Hag dealt out to Sancho. I've assumed for a while Arteta looked at his performances and got mad that he hadn't adjusted fine details that are less obvious—body shape, positioning, stuff I don't tend to notice.
As for the reason Pépé didn't have a market, it's because his form and morale declined in exile at Arsenal and then he was loaned out to an inferior league where he had an injury hit season, and also his wages were far too bloody high—£140k per week is too much for a player who's never produced in England.
With backing Pépé could've been a 1 in 2 G+A wide player or striker in the Premier League. He's a bit short on personality, but has great ability and could've been used more generously. The biggest mistake wasn't Arteta's, though, it was signing him in the first instance.