This likely affects very small number of people in vrc. I am 2 meters aka 6'7. I don't have fullbody tracking so I can't confirm if this is present with fullbody.
When I T-Pose or otherwise get my hands relatively far from my head (other notable example when this happen being A-pose), they get to the basic pose, ie. hands on my hips (like when you open SteamVR menu). As soon as I move them back in distance where they work normally, they get back to the real position. This only happens locally so others see my arms where they should be.
I am fairly sure from my testing that this happens based on distance to the HMD.
This is for me very annoying and immersion-breaking. I think it could be fixed rather simply by increasing the distance for which the IK assumes controllers are too far from head to be getting real values. Or make it somehow scale with "real player height", even though that might backfire as people adjust this in weird ways to fit their avatars properly. Or disable the hands on hips completely; as far as I can tell, fbt users don't have this at all and their hands just stay fully outstretched when their controllers are far from their body.
This isn't something that started happening after recent update but something that has been in VRC for months.