How can current arc from the pencil without activating alarms?
As long as the circuit is complete (i.e. pencil plugged in generator, pad attached to generator and patient) the pencil can arc without being in contact with tissue regardless of the return electrode used. Radio frequency current can capacitively couple to the patient and return current back to the generator via the return electrode even when the pencil is not in contact with the patient. An analogy to help in understanding this is to consider a radio. The pencil acts as a transmitter, and the patient/return electrode a very large antenna. When a patient, who is conductive, is connected to a return electrode (gel pad, or MEGA 2000) the return pad essentially assumes the size of the patient, and becomes a very large antenna. The antenna, or patient, receives the signal transmitted by the pencil and thus activates without sounding any ESU alarms.