Strictly: Seann and Katya address cheating scandal
Arlene, 75, said the pair were "consenting adults".
She also hinted that Katya's husband, fellow Strictly dancer Neil Jones, was standing by her because they have an open marriage.
Appearing on ITV's Lorraine, Arlene said: "The public appear to be the moral guardians.
"I am not condoning what they did but it is a dance competition and unless they have signed some disclosure that there is a behaviour contract they are not about to be stopped, I believe, from dancing. That is what they've been hired to do dance."
She also stressed the "intense relationship" between the celebrity and the professional who have a "goal" to reach together every weekend.
She explained: "You get closer and closer, you're thrown together."
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Arlene said Katya, 29, and Neil showed real togetherness before revealing she knew plenty of couples who were not exclusive.
She added: "I know many people who have open relationships, we don't know that, and we knew nothing about Seann's relationship with the girlfriend - and it has been something that is ongoing."
Unlike Katya, stand-up comedian Seann, 32, was dumped by his girlfriend, actress Rebecca Humphries, also 32.
She called time on the couple's five-year relationship in a Twitter statement and left, taking the cat.
Arlene also said the judges should not take the kiss into consideration when scoring their dance.