My guess is that the awning met up with a severe wind gust at some point in its life. I can't imagine that damage happening during normal operation of opening and closing.
But I too would think that the fabric would have gone first.
Anyway, looking at the photo again, you may need to replace those arms. There looks to be a lot of warped metal around the joint as well as the strip sticking out. Perhaps you can "make do" with just removing the metal strip. It will not be as strong as new, but maybe would work for a long time if you're careful.