System D-Bus does not allow punching out ownership with conf files
I finally found the issue. When Dbus looks for configuration files for punching out permissions (like ownerships) the file not only must be in system.d/ but it must also end in .conf.
My configuration file "org.dbus.arduino" should have been "org.dbus.arduino.conf". I removed the code from system.conf. Confirmed I no longer had permissions, created a configuration file at "system.d/org.dbus.arduino.conf", I was granted permissions. I then attempted to rename the file to just "org.dbus.arduino" and confirmed the permissions were denied.