The undermanned Socceroos handed debuts to Nathaniel Atkinson and substitute Nicholas D'Agostino in Jeddah, but were undone by a Salem Al-Dawsari penalty in the second half to suffer a third defeat in the group.
It means Australia have won just one of their past seven qualifiers heading into June's playoff match against United Arab Emirates as speculation continues to build that Arnold is unlikely to be in charge for that game.
The Green Falcons, who had already been confirmed as finalists at Qatar 2022 when Australia lost 2-0 at home to Japan last week, topped the group on 23 points with their first World Cup qualifying win over the Socceroos.
They were eight points clear of the Socceroos.
With Atkinson debuting at right-back, Arnold also handed starts to midfielder Denis Genreau and striker Bruno Fornaroli while Gianni Stensness moved to central defence in the absence of Milos Degenek.
A defence-splitting pass by Adjin Hrustic released Boyle who sprinted clear and rounded the Saudi goalkeeper before slotting home but his celebrations were cut short as the assistant referee flagged for offside.
After a four-minute long VAR review, the decision was upheld despite replays suggesting Boyle was very close to being onside as he started his run.
Mabil fired a dangerous shot which had to be tipped over the bar in the second half but Australia's enterprise came unstuck when James Jeggo was penalised for a clumsy trip on Sami Al-Najei inside the box in the 62nd minute.
Al-Dawsari stepped up to send Mathew Ryan the wrong way and give the hosts the lead.
Encouraged, the hosts finished the game the stronger team and it was only a couple of smart saves from Ryan that denied Saudi Arabia a second goal.
Attention now turns to the sudden-death playoff against the UAE with the winner of that match to face South America's fifth-placed nation for a spot at the World Cup.