What does it look like with more Subdivision Iterations?
I think someone else had this issue. I guess it is something that is difficult to subdivide properly. Can you upload a simplified scene.
here is the scene " https://www.dropbox.com/s/ooqsmev4l19ivhy/test%20scene.c4d?dl=0 "
This is what I get with 1 & 2 subdivisions. What is the effect you expect to see?
What if you add an Arnold tag to the Subdivision Surface object? It will export the subdivided mesh instead of doing the subdivision in render time by Arnold.
So it seems like the subdivision algorithms in Arnold are not doing what you expect. However the OpenSubdiv Bilinear mode of the C4D Subdivision Surface object does. What you can do is to let C4D do the subdivision and export the subdivided mesh to Arnold.
It's not as efficient though.
Don't think it's a bug, more like a limitation with subdivision. Does the workaround described below (OpenSubdiv Bilinear mode of the C4D Subdivision Surface object) work for you? Or using a dense mesh instead of render-time subdivision?