When you attempt to upgrade a piece of equipment through the smithing table that is an incompatible set, the arrow overlay is placed in the position of the legacy smithing GUI.

Steps to Reproduce:

• Open a world with 1.20 experiments enabled
• Grab a smithing table, a trim smithing template, an armor piece that is not leather, chainmail, or turtle, and a material of the same armor type
• Place down the smithing table, click on it, and attempt to combine them in the smithing table
  • Arrow overlay uses the legacy smithing GUI postion

The two GUI sprites attached are just to show the arrow positions compared to each other.