Somehow I had a feeling this was the case.
We still don't even really know what they are but I can't find anything to discount variabilis. I did a little looking for your square arm syndrome but only found a paper on the guy at the top of the page that made any kind of close reference (oddly enough the paper was by our Dr. Steve O' Shea and gave me some interesting insights that had nothing to do with the subject at hand).
I found this abstract:
On the ecology of Octopus variabilis typicus (Sasaki), with special reference to its breeding habits | CiNii Research but the full text is in Japanese and not toll free.
In this paper are given some results of observations on the general as well as the breeding habits of Octopus variabilis typicus (Sasaki), carried out in Tyosen (Korea). This octopus lives in the shallow calm water of muddy bottom, burrowing a deep tunnel in which it hides itself. On the western coast of Tyosen it is caught with a kind of spade or a small hand plough, digging the muddy flat at the low tide, chiefly in spring and autumn. The main breeding season is from May to June, sometimes extending to the autumnal months. The number of the ripe ovarian eggs found in one female is about 120-130. The egg is comparatively large and takes an elongated egg-plant form, measuring 21.1-22.1 mm×7.0-7.9 mm in those shortly before hatching. The basal part of the egg-shell is elongated into a filiform stalk of about 9 mm in length, by which the egg is attached to the inner wall of the-tunnel. After spawning the female parent is supposed to guard anxiously over the eggs in the hole, till the young hatches out. The larva just hatched is about 29.0-33.2 mm in total length, and the arms are already very long, showing the formula 1>2>3>4, as in the adult. The organisation of body of the young after hatching is so well developed that it can enter the burrowing life from the beginning. It seems to become mature in two years, and its span of life to be over three years. The size of the adult commonly met with is 400-600 mm in total length, and the largest ones reach over 700 mm.
Nice lifespan if this turns out to be the proper species and it is viable to raise the young. 40 cm is not too bad for max size but 60 - 70 would be tank challenging. These numbers agree with Norman's sizing (10 cm on the body and 30 on the arms as minimums). Unfortunately the mud bottom (contrary to my thinking) and burrowing might not work out so well unless they can adapt to living in LR or plastic pipe.
Still no reference to the squared off arms though. It does mention that the first pair are the largest and each adjoining pair smaller than the last so that is something to look for again in the video and when you can coax them back out.
I also found the 1929 description:
http://74.125.47.132/search?q=cache..."Octopus+variabilis"&cd=7&hl=en&ct=clnk&gl=us
Octopus variabilis (Sasaki, 1929)OCT Oct 21Polypus variabilis var. typicus Sasaki, 1929, J.Coll.Agr.Hokkaido Imp.Univ., 20:90.Synonymy : Polypus variabilis Sasaki, 1929.
FAO Names : En - Whiparm octopus
Fr - Poulpe fouetSp - Pulpo antenadolateral view
Diagnostic Features : Mantle elongate, oval, up totwice as long as broad; skin covered with variable-sizedwarts and papillae; 5 to 8 cirri over each eye, one quiteenlarged; neck strongly constricted; web very low. Armsvery long, unequal, arms I longest, up to 2 times longerthan arms III or IV; male with some considerably enlargedsuckers; right arm III hectocotylized, at maturity onlyhalf as long as left III; ligula large, conspicuous (1/4 to1/7 the length of the arm), terminally rounded; groovedeep with 10 to 14 strong transverse ridges and grooves;calimus relatively large, bluntly pointed, conical; 20 to24 lamellae (total count).Geographical Distribution : Western Pacific Ocean:Japan; limits unknown.tip of hecto-cotylized rightarm III of maleHabitat and Biology : A benthic, littoral species occurring down to about 200 m depth around Japan.Size : Maximum mantle length 10 cm total length 70 cm; sexually mature at about 50 cm total length.Interest to Fisheries : The species is important in the Japanese fishery off Honshu. It is also one of thethree species reported in the Chinese octopus catch. No separate statistics are available.
I also found this video on YouTube showing fishermen catching an octo (doesn't say what kind) but we are not even sure Korea is right. They kill the octo in the film but you can get a good look at it for comparison: