Yes it will arc if the power is on. We tow a small travel trailer and that is one of the things at campgrounds that can be a problem. The contacts in the park electrical pedestals eventually burn themselves up from arcing.
Keep your contacts clean and turn off the heavy load when you plug in.
The snap when plugging in is normal - just the WFCO converter has enough capacitors on the input side that soak up all they can get for the first few shore power sine-wave cycles there would be a small arc, add in the Xantrex Freedom Inverter and you've got a larger snap for sure. Now add in any appliances (microwave, power bricks, even apple USB chargers) plugged into outlets and it gets even snappier.
That is one of the problems with things like large LED lighting installs with new tech built-in power supplies, the initial surge current for eleventeen or three-eighty of them just looks like a short circuit for 1/10th of a second.
Just keep the plug/socket dry and free of oxidation so no/low chance of self-heating and all (should) will be fine.
The other thing you can do is:
1) plug your tester into the pedestal, turn on the breaker on the pedestal, and verify it's wired correctly.
2) Turn the breaker on the pedestal.
3) Plug in
4) turn the breaker on.
This will prevent arcing on the contacts. Even better if you also turn off the master breaker in the rig, or if you have a smart inverter like my Magnum 4024MSH that has a transfer switch inside, so that the rig will be connected after the plug is all the way in and solid.
Also, if you can get some silicone dielectric grease, and put a thin layer on the contacts of your shore power plug, it will help prevent the plug from getting stuck in the pedestal.
Reminds me of when we were off grid with 114Volts DC from our wind plant. DC works on many items with universal motors and heating elements but their thermostats require a capacitor to help break the contacts. It then stores a bunch of electricity until the contacts close. The Ms. unpluged the clothes iron and happened to touch the plug ends before the contacts closed. She decided not to become a sparky that day! Took me about a month of doing the ironing to make amends too.