Further testing is suggesting that the barrels are a red herring, and something else is causing the hammers to disappear. See my reply below for further updates.
Hammer Throw projectiles disappear (as if colliding with a wall) when they hit the spot where a barrel used to be, even after that barrel is broken.
This video is taken immediately after completing an arena wave. The hammers worked fine for the duration of the wave, but as soon as I broke my reward barrels, they started exhibiting the behavior shown. The spots they’re disappearing are where reward barrels used to be, before I broke them.
I then move to a different spot in the arena to show that they work fine in other places (where there were never any barrels), and back to the center (where they show the bugged behavior again).
This issue gets temporarily corrected every time the Arena zone gets reloaded, but since there isn’t a zone transition between every set of 5 waves, it can make Hammer Throw feel really bad in Arena - having all your projectiles disappear if you fight in the center is pretty rough.