They go to the fa list, or get retired, depending on a few different things.
As for Arce, he wasn't rated as an all star. In fact he was/is rated pretty darn poorly and is incredibly unlikely to ever become anything close to an all-star or even a cup of coffee MLB player. His BABIP and avoid K potentials are simply dreadful.
But sometimes guys develop in unlikely ways once the game starts and the dev engine takes over. If it gives them boosts, they get really good. In any given game out of the hundreds of thousand and millions of games folks play with the MLB roster set, anything can happen, no matter how unlikely. The game doesn't recognize names.
