Yes, when you squeeze it, it just springs back. That top cap and the shaft are connected to a spring inside, so you would need to put a vice grip on it somehow and hold the top cap from turning, when you unbolted it and pulled it out of the arm. You could carefully unwind the spring, counting the turns and direction and put it back when done, or secure the vice grip while you work with the arm.
The small telescoping "brace" that the slider is connected to is called a rafter, just so you know. Somehow that large extrusion has become spread. With the top fitting out of it, you could easily over squeeze it and hopefully it would spring back to the correct width.
Dometic does have repair kits available that have upper and lower main arms, available in white, and gray. Many parts have been discontinued.
Dometic 8483000.002 Awning Hardware - Short Straight Side, Satin
SKU: Z1384-8483000.002 $462.53
They make a long arm version also.
Charles