Taken as a whole (Matrix arm.basis()), it is actually the orientation matrix of the arm.
The single bases (Vector arm.basis().xBasis, and for y and z as well) are actually the director cosines of the cartesian axes in the rotated system, i.e. they tell where the original, unrotated x,y,z versors went after the basis() rotation.
In practice, the yBasis is the versor along the arm direction (elbow to wrist), the zBasis is along the arm normal according to the palm normal, and the xBasis is perpendicurar to both according to a right handed coordinate reference system.
This convention is also true for all finger phalanxes, and for the palm.
I hope the figure below helps: