[Spoilers] The shirtless scene in Deadpool & Wolverine is thematic
Earlier in the film, we are told that Worst Wolverine wore the Xmen uniform out of guilt and to remember his lost teammates, Deadpool jokes about it.
In the finale, when Wolverine redeems himself, not only fighting to save the people in the void but also DPs universe, his chains (the suit) symbolically explodes showing that he is free of his guilt
Also this is a pretty good way of tying in the mandatory shirtless scene in a somewhat meaningful way even if it doesnt seem so at first in a movie full of call outs
Also DP goes meta and says that Jackman is wearing the suit because he has let himself go since the divorce, thus lowering our expectations so, when they go for it, we are caught off-guard.
Here's another piece of trivia I learnt from The Corridor Crew. Hugh Jackman has been treated for skin cancer in the past and has a few scares recently as well.
So in the scenes where his yellow suit is armless, those are CGI arms you are looking at.