Not sure if this is a bug or not. I'm stuck on a slightly later release of arnold at the moment so not sure if fixed either.
Arnold core 184.108.40.206
Add an arnold spot light to the scene. Point it perpendicular to a flat plane. Set the spot light's Roundness to 0. Notice how the light appear as a square which is correct. Set the Drop Off parameter to 1%. The light now jumps to being a round projection. Is this a bug? Surely the drop off in this case should make the corners of the square projection to falloff instead of immediately forcing it into a circle?