In what sense is "Unbendable Arm" a principle as opposed to, say, a party trick?
It's a strong posture. So some people use it like a sword. (ex. te-katana) And you'll see many techniques end with the arm shape looks like the unbendable arm. Btw, one of the reason why it is 'unbendable' is most people only use localized arm or shoulder power to bend it.
I think another hidden(?) purpose of it is to learn how to negate incoming energy like taichi guys do