First question I would ask is why are you using displacement? What’s the goal beyond this test asset? Displacement is a pain in the ass, hard to edit, and uses a ton of memory. Most productions I’ve worked on actively avoid it, unless there’s absolutely no other way.
To be honest I hardly see any issue . But I would check if UV seam edge has split vertex normals. Any geometry using displacement shouldn't have hard edges. i didn't use Arnold much . I used Clarisse FX and it had special checkbox that made sure uv seams got merged with displacement . Maybe Arnold have it too somewhere.…