I can confirm seeing two users respawn in the arena. Always with the gear they died with, and always at the very center of the arena, not on a pedestal. Both times I witnessed it on "Sg 4", and the users were fully capable of dealing damage to other users.

Im not sure if this last part was a result of a user having been in this state since the completion of the previous round, but one user was capable of roaming during the starting period where other users were stuck on pedestals, and thusly had advantage of accessing all of the chests early.

 

http://www.ecocitycraft.com/forum/threads/sg-bug-report.88401/

I witnessed a user having the same issue. What I think happened was that the user became dissociated from the actual SG game and since he was in the SG map/world, the user could respawn just as any user respawns in the world they're in. As in, he wouldn't be able to use any of the ingame arena commands such as /sg vote or /sg leave. He would have to use the same commands as a user in any other world which is /sg join. /sg join I believe would fix the problem. I'm not a dev or a programmer so I have no idea why it occurred. Just posing a possible solution.