Hard to tell how they work. Externally they are wired the same as a Ground Fault breaker, where both the power conductor and neutral are hooked to the breaker with a neutral lead to the neutral buss bar in the panel. It may be a GFI on steroids seeing an arc (dissipation of energy) as similar to a GFI leak. IMO.
Should be all new residential construction at this point with some remodel work getting excluded, dependent on local inspectors interpretation. Significant cost increase considering an arcfault breaker v.s. standard breaker.
Not fool proof. Appears to be a fair amount of service calls related to Arcfault installations. IMO
Interesting to note that I had a PC hooked to an Arcfault circuit tell me im-proper neutral/ground connection, but the PC did work and my polarity tester showed normal/properly grounded.