Given Lowes main business in residential, I wonder why they carry Arc Fault and even wonder if the two types can be used interchangeably. I assume they are not interchangeable and worry that the fact that they look similar could easily cause a mistake in a DIY project.

If possible in a few words, what is an Arc Fault used for?

Not obvious to me why a bedroom would be prone to electrical faults that involved arcing more than any other room. Electric blankets? I'll look for them if I ever buy a newer home.

More lamps, clocks, radios, TVs, computers, etc. More extension cords. More overloaded outlet 'multipliers'. More cords run underneath carpeting. More plugs that are damaged by furniture being shoved back against them.
Statistically, more fires start there.
Also, there's less chance of getting out safely if you wake up to a bedroom filled with smoke than if you get woken up by a smoke detector going off in another part of the house.

It is unlikely that a replacement breaker would need to comply but the only people who can reliably tell you is the local electrical inspector or an electrician.

The warning time for fires in bedrooms is greatly reduced, thus the initial push to get AFCI devices on BR circuits.

I'll take a closer look a the CB that went bad, I just assumed it was a GFCI as it fed a bathroom circuit - but strangely (to me) the failed CB has two (White) ground wires coming out of it.

Both conductors are passed through a single toroid pickup coil.
If the currents are equal the toroid has no induced voltage (the magnetic fields cancel) and nothing happens.
If the fields do NOT cancel a triac is used to open the circuit.
The sensitivity is as simple as how many turns on the toroid the sense winding has. More turns, more sensitive (less current imbalance).
AFCI devices look for the high frequency noise generated by an arc.
It will be at a multiple of 60 Hz, so filtering is not that hard.
You need to consider that an arc generates electrical noise form the frequency of the voltage to light (the arc itself).
The noise twice a cycle as the arc starts and stops with the 60 Hz voltage.
Sense the noise, turn off the circuit.

AFCI devices are not required to be as sensitive to current imbalances GFCI devices.

Arcs do not trip a CB since the current does not exceed the CB rating.

An arc from a break in the hot line is going to the hot line.
TThe load on the circuit limits the currents, but the arc produces very high temperatures.

A fault is when the hot shorts to the neutral (or ground) and the current exceeds the CB rating.

Breakers for residential use are thermal-magnetic.
The thermal is from heating of a section of conductor in the CB.
This allows brief overloads to pass without tripping the CB (like 'slo-blo fuses). A motor starting or heating elemt turning on are allowed to operate since the current falls quickly and fails to trip the thermal overload.

The magnetic occurs for 200%+ current and results in a very fast operation. The higher the current the more magnetic force is generated and the faster the breaker opens.
At very high overloads the breaker opens in just a few milliseconds.

People are not very good conductors.
You are very unlikely to ever pull enough current through your body to trip the breaker.

Yes, the Circuit Breaker defines how much power one can draw fom it circuit. I'm not sure why you had a ground fault breaker, but the "more the merrier" I guess as far as this type breaker is concerned - they do provide personal (you) protection in addition to protecting the wiring/building.