"Hands by side" actually is license because there is no more natural position of the arms than by the side. It doesn't matter if he knows what he's doing, being clever, or whatever. His arms are at his side. By the Laws, that should be the end of the inquiry.
No. The laws are you can’t intentionally play the ball with the arm. The ‘by the side’ is literally only in the guidance & it’s there to help determine whether the handball was intentional. Given he leant into the ball, it’s irrelevant.
And sure, there is technically a loophole that you can intentionally play the ball with your hand / arm if it is in a natural position but determining intent is pointlessly subjective and not something you want referees doing.
All rules require subjective interpretation. The guidance is there to help, but it’s all a matter of opinion.