I've sat and watching this with the eye on 'What went wrong here?' because there had to be something go wrong to get to the final outcome. That’s what we need to fix. It’s easy to say VAR is poor but you also need to find what went wrong so it’s better going forward.
Last night I watched this a few times and made some assumptions
1: The referee cannot see through Fentons body to see the chest touch. From his view, the only option he can see is ball hitting the arm. Reasonably if that’s your only information, you would award a penalty. (Did it hit the arm? I think it brushed off the arm from his chest but glancing)
2: While I don't put a lot of stock in player reactions, his are unusual in so far that they seem genuine, and not a con job. 'Don't worry lads' thumbs up as opposed to an outright protest because players know VAR will get it.
3: From there the VAR would review and would have asked the referee questions. Perhaps a 'What did you see?' The referee would reply 'I saw it hit arm' The VAR asks himself 'is this a clear and obvious error? Well it did hit the arm so he is not wrong, don't overrule'
Reading Domes reply above (assuming this is correct from the match officials) actually points to the fact that this is another case where the proponents do not know the law.
Making yourself unnaturally larger in the penalty is a key component of handball, but only when it comes directly from a play from the opponent. Page 104 has a clause that (paraphasing) it’s usually (keyword) handball if the arm/hand is above/beyond shoulder level unless the player deliberately plays the ball which then touches their hand/arm. The only question you then need to ask is 'Does Fenton attempt to deliberately play the ball with his chest?' The answer to that is yes, so you don't usually have handball. Also, why would a player who attempts to play the ball cleanly, then go and handle the ball? They would not, especially with the aim of blocking a cross and knowing the VAR is likely to catch you if you do try to cheat.
So why does the VAR not say anything? My assumption is probably because they are not strong on law or coaching or perhaps they did, and the referee stuck to his own opinion. Hard to know without the audio. To use an outworn cliche 'what does football expect here?', it’s not a handball.