While the japanese pronunciation may be AR-SAY-US, it was changed in English because it sounded like “arse”. So therefore it makes most sense to change the English name to AR-KAY-US, keeping the deus part, but removing the arse sound.
What does arceus mean?
Arceus (アルセウス, Arceus) is a Pokémon species in Nintendo and Game Freak’s Pokémon franchise. Within the lore of the Pokémon series, Arceus is the creator deity which created the games’ universe.