Thanks for the really useful "transparent diagnostics", the problem is really clear. I can see it in my terminal when I enable arrows.

Yes, let's fix this please. I'd be most grateful for a Pull Request - it looks like you have identified the change necessary.

We will need to define another option, so as not to interrupt renderer.icons.padding users who expect no arrow padding. Does nvim-tree.renderer.icons.folder_arrow_padding sound reasonable to you?

This functionality is historically fragile, so we will need to test all permutations and combinations of renderer options used in padding.lua.

Once this is all tested and ready to merge, we can refactor the option in a backwards compatible manner. This is messy, so we do it last so as to avoid noise in the PR.

  renderer = {
    icons = {
      padding = {
        icon = " ",
        folder_arrow =  "",
      },
  },

I used your naming idea for the new config attribute. I have done minimal testing but will try to test everything tomorrow.