This bug is reproducible when exiting out of a moving boat. 

If you get in a boat and hold one of the directional keys (W,A,S,D) and exit the boat by pressing left shift while still holding a directional key, your arm will disappear. You cannot right click on anything or place blocks. You cannot open chests, gates, doors, crafting tables. E still opens inventory. You can still destroy blocks. You can use a pickaxes and axes to mine. You can not hit or attack mobs with your fists or a sword. 

The issue is remedied by saving and quiting back to the title screen and reloading the world.