@peli asked me to provide some feedback, and I did. Here is what I came up with:
Keep in mind that my intention is to build a CS0 course using just the block interface. So, a lot of my feedback stems from that perspective. Some of my feedback is related to MakeCode itself; the rest will be about MakeCode Arcade specifically.
I love the premise, and the MakeCode interface is really easy to use. I really love the Arcade adaptation of PXT; there is some really clever stuff there. It’s just a lot of fun! The documentation has really shaped up, and I find that I’m using it frequently. Major kudos to the team on the great work so far on documentation. Keep it up!
Using screenshot PNGs as your import/export format is absolutely brilliant. Whoever came up with that: mad props.
I know you’re working on making an entire set of blocks that deals with animation. I’m looking forward to that. Edit: Now available as an extension!
I’d like to have the ability to rotate sprites (a la Asteroids and SpaceWar). I’m planning on creating an extension to deal with that, but it would be lovely to have that built into Arcade.
Edit: I’ve created an extension for this; see response, below.
The one thing that I can’t teach very well with blocks is variable scope, since all created variables get global scope. I can talk about local scope with some of the event handlers, which is good. I’d love to see functions be able to take parameters and to be able to define local variables (or member variables … depending on where they are implemented) in MakeCode, though. I know that’s more of a core PXT request. Version 0.8: You can create functions with parameters now!
Also something really picky: When detecting an overlap with a wall, can you create a variable that indicates which tile in the map was hit? For my Breakout clone, I had to guess. It works … most of the time. 
Another really picky thing: Can you overload the join function in the Text blocks to accept numeric variables in addition to strings? I don’t see a way in blocks to join a string with a number to use, say, in a speech bubble. See response below.
I can’t begin to tell you how excited I am for BrainPad Arcade, too. And it’s made in my home state of Michigan! Love it!
Brilliant product. Keep up the hard work!