Whilst I was surprised they overturned it on a second appeal, the decision is clearly correct. Take the club element out of it and look objectively at the position the arm was put into. It wouldn't have hurt Atkin and there was no force involved. It's definitely a penalty and I agree with the yellow card as it stopped a quick play the ball near the line, but missing the Grand Final for that would be wrong. Saints were also able to demonstrate very similar if not worse incidents from this season that were also not banned.
It's also not the first time a player has been cleared to play in a Grand Final after being banned. Lee Smith for Leeds was cleared to play on appeal after being given a 4 game ban for kicking a player in the head. That maybe puts Knowles' (stupid but not dangerous) act into perspective?
I don't think any player has ever been banned from a Grand Final in Super League (I could be wrong).