Doesn't change the fact he was Austrian and Austria willingly participated in his enterprise. Arnold's father wasn't conscripted into the Nazi party or the SA. Arnold is aware of the history and those who participated.
His father was not found guilty of any crime but he belonged to an organization that sanctioned such crimes.
This is why Arnold just might be more sensitive to such things. It was'nt meant as a negative thng against Arnold. If anything, it was meant to be positive.