There are so many very good answers up there. To these, I would add only this. Usually, before the congregation extends their arms, they are gently invited or asked by the priest to do so as a means of support and blessing upon those for whom it is intended. For example, "Please join me in a blessing for so and so on their birthday." (or their anniversary or whatever)

It is an invitation to participate as a community, to bless and support one another. The positioning of arms and hands is in no way meant to reflect the Nazi salute. Although I don't know the history about why or how it was decided to include it as a current part of the celebration, it is clear that the intent is to allow blessing to flow through us to one another.

If it makes you uncomfortable because of the association you hold with that particular symbol, don't participate in the physical gesture. But don't allow your discomfort with the gesture make your miss the opportunity to "bless" the person in your heart.

KT