How to fix cracked minifig arms?
Arms are cheap

I'd recommend just buying some cheap replacements from a site like BrickLink. You can buy an unpainted torso for example, and some sellers even sell just the arms (some of the cheapest listings are described as cracked though, so avoid those). So long as the arm is not painted (which they are not usually), this should be a relatively cheap solution with no repair work besides swapping the arms.

Plus, considering how small they are I'm not really sure there is a practical way to repair them, and still retain their full function.