Flashing blue dot on Google Map
The arrow is your current location, except that it also represents your current location and orientation in navigation mode.

Google Maps automatically switches between the blue dot that represents your current location to an arrow in a circle when you are using the app for navigation, as you can see in the following screenshots (surroundings obscured for general privacy):



Regular (non-navigation) mode, with blue dot representing current location


Navigation mode, with arrow representing current location




As you can see, these are the defaults and I doubt they can be changed. You might just want to ensure that you aren't currently navigating anywhere (exit by tapping the 'X' at the bottom left corner) and your current location indicator should return to its usual blue dot self.