I find it a bit baffling that they'd sell themselves when they seem to be doing a fine job of making money with excellent prospects of making more in the future.

There was some verbiage in there about them hoping somebody else arrives with a better bid. The deal isn't final yet. That leaves a bunch of room for speculation on other possible buyers. The thing is that a big part of ARM's value is that they're something of a Switzerland, in that they're neutral and will license to anybody. ARM chips roll off multiple foundries, designed/integrated by multiple third-parties. So, yeah, Apple could certainly outbid anybody, if they wanted to, but then other ARM licensees (Broadcom, Qualcomm, Samsung, etc.) would go nuts, maybe get serious about some sort of alternative to ARM like Berkeley's RISC V.

Whoever does the buying, the team in the U.K. will presumably still stay put and continue doing their thing. Who knows, maybe they'll even get additional resources from the new buyer and then hire more people, etc.