@Trumpy

The idea, as I understand it, isn't specifically to protect against all possible arc situations. Instead, it is to protect against a mid-range current fault that is not high enough to cause an instantaneous magnetic trip, but still needs to be interrupted because a thermal trip could manage to do so. It is called arc-fault because this mid range of current fault is based on a persistent arc that needs to be rapidly interrupted due to it's quick ability to start a fire (in seconds, as opposed to a hot wire which could take a few minutes). The physical action of an arc is also what puts it in this "no man's land" between magnetic and thermal trips where the usual trip curve is not acceptable for fire prevention.

One complication that prevents merely adjusting the trip curve is that some devices can briefly draw the same current levels briefly. Instantaneous magnetic trips are normally set high enough to avoid trips for these reasons. It comes down to there being two different cases of mid-range fault currents, one of which we do not want to trip on (motor starts, for example), and one which we do (continuing arc faults).

The arc based mid-range fault currents are the issue of concern which AFCI devices are proposed as the solution. This is a plausible solution because these devices are designed and/or intended to discriminate between the two kinds of mid-range current levels where we want to interrupt in some cases and not in others.

So the next question is, can "better design" and "modern circuit breakers" and/or GFCI be a suitable alternative solution?

I do suggest that AFCI devices actually are "modern circuit breakers".

I do NOT see how GFCI offers the ability to interrupt this kind of issue. That is not saying that GFCI is bad. There are other issues where GFCI offers a suitable solution. I just don't see how it can be a solution in this case.

That leaves "better design". This is more complicated to consider because it is not clearly defined what is a better design. For this "better design" to prevent these undesirable mid-range currents that involve an arc, it would have to be a means to suitably prevent these arcs at a sufficient statistical rate to be a worthy alternative.

There are numerous places where these arcs can occur. This includes both building wiring (in the scope of electrical codes and electrical contractor or electrician work), but also includes utilization equipment, and (often raised), the cords in cord and plug connections.

Good design I think would include removing risks from areas where arcs might, even in extreme circumstances, occur. A loose connection to a switch or outlet, or just a junction, is one of these cases. But required practice already deals with this be requiring these to be in suitably rated and listed fireproof boxes, with cables required to not be able to propagate any fires that might be started inside the boxes.

But this is about more than just loose connections.

The greatest risk appears to be outside the building wiring. NEC has limited scope, if any, for this. It is more of a product safety issue. With a massive base of existing unsafe product in place, solving this would be an overwhelming undertaking. Remember, the USA is a country where a major part (if not majority) of the population prefers trust on a private business instead of the government (not something I personally agree with, but still a reality that cannot be taken lightly here). This is in contrast with other countries, such as a lot of Europe, where the trust works other ways (more trust in government rather that private business), at least for lots of the people. Is NZ like that?

Does NZ have a program to go to everyone's home to remove the old unsafe wiring appliance cord wiring with something that is safer (perhaps more hardened against the kinds of damage that can create these arc situations)? Or has its product safety requirements mandated this for a sufficiently long period of time (decades) that unsafe appliance wiring is statically non-existent down under?

I just wonder if AFCI devices will, or will not, really make homes using them as safe, or safer than, homes in NZ (and other places that might not be adopting the use of AFCI). Or could it be that AHJ in these places are just waiting for some hard statistics to emerge regarding the safety (or lack thereof) before deciding whether promote AFCI devices or not?