Seems like a bug to me, the whole point of breaking up a social fight is to prevent injury, and since its not a "full" fight, it seems possible arresting them without incapping might be possible, yet theres no opportunity to arrest anyone.
Real shame because I found this out right before a person died from a beating.... I would think pain should stop them long before being incapped.
It's as designed; arresting only works if the target accepts the arrest, and nobody will if they're fighting.