3 week old that usually either gets arms out of the swaddle or swaddle material is loose at the top from bub moving arms constantly and concerned there is loose material near face. Is it ok not to put arms in the swaddle? Or try a sleep suit instead?

Some babies just do not respond well to wrapping & like their arms free.
Often these babies like their arms free or like to touch their face or suck fingers, & will wriggle to get free.
Have you commenced tummy time with your baby?

You can wrap baby with arms out (as suggested for 3mths & up) or you can stop wrapping &/or use a safe sleeping bag.

The sleeping bag should be the correct size for the baby with a fitted neck, armholes (or sleeves) and no hood.
https://rednose.org.au/article/what-is-a-safe-sleeping-bag

Principles of safe wrapping.
Wrapping & swaddle products
https://rednose.org.au/article/wrapping-babies