A-fang: "Arms folded" is a position that a person can have. The arms are at the waist, elbows bent, and the hands near (or holding) the upper arms just above the elbow. "Arms folding" is not used to describe this position.
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Anonymous"Kevin stood in front of the card with his arms folded."His arms were folded. Folded is a past participle here.
Anonymous"He just stood there, with his arms folding, without thinking of giving a hand."Are you sure you write it correctly?