it looks like using the arc block only one color (either outline or filling) can be defined at the time. The color which is not defined seems to be random, causing the unwanted outline.

So instead of using the arc block directly you could use the Advanced - Execute code block which then allows to define both colors together like this:

lcd.arc(120, 160, 100, 50, 0, 90, color=0xff0000, fillcolor=0xff0000)

Thanks
Felix