What happened? I was interested throughout, but disappointed in the end because being the sci fi fan that I am I want to understand what how it was possible for the arm to be a length of road - a very specific road - which it knew very specific details about - temperature / number of cars, etc. There was a good idea with no explanation and I wanted more.
The impression that I got was the BCI chip had been a general purpose processor refurbished, which had originally been used for highway statistics collection and retained memory of its past work in a way that it wasn't supposed to. Its integration was successful enough to allow it to allow functional control of the arm without any outward symptoms. Since his arm was a prototype and the BCI was new enough to not be well understand, the refurbished chips were presumably reusable in other respects and had shown no issue, but when you stick a computer interface into a brain there were unforeseen side effects in his perceptions affected by the incompletely wiped chip. Replacing the chip with a fresh one made it operate as a normal arm.
How does it know specific details about the road?
1. Theoretically, it could have some kind of wireless connection to its original location, and is collecting statistics from sensors there. maybe the sensors even recognize the arm BCI as their proper master because it has the proper ID information to prove its identity.
2. More likely, though, I think that the BCI is just doing its best to interpret binary data provided by feedback from the arm. Obviously the actual arm does not count a number of cars driving on it, but maybe it is just trying to interpret unrelated information like "resistance" or "power consumption" and because of the leftover programming is trying to parse that binary data into something highway-related and just giving interpretations of what are essentially gibberish to the highway portion of itself.
I like Zelda's take on the story. It's not so much about a glitchy arm, as it is about the character's perception of the arm as a separate entity worth memorializing with the tattoo. At the edge of the space between the BCI and himself there was an entity that had not existed between the surgery, an entity that was both an arm and a highway. He doesn't necessarily understand it, but he wants to mourn its passing anyway.