All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad is His slave and Messenger. We ask Allaah to exalt his mention as well as that of his family and all his companions.
It is from the Sunnah of the Prophet that the praying person keeps his forearms away from his sides.
According to a narration reported by Imaam Abu Daawood that the Prophet would keep his forearms away from his sides during prostration.
Another narration by Abu Daawood of the Hadeeth of Abu Humayd As-Saa'idi describing the prayer of the Prophet states, "…he kept them (his forearms) away from his sides", and the narration reported by Ibn Khuzaymah stated: "He put his hands away from his sides." Al-Bukhari reported a narration from 'Abdur-Rahmaan Ibn Buhaynah describing the Prophet's prayer: "He (the Prophet) would raise his forearm above the ground, and keep them away from his sides in such a manner that the whiteness of his armpits could be seen from behind."
These narrations clearly show that keeping the forearms away from the sides during prostration was the practice of the Prophet .
But Muslim scholars restricted this practice to those instances in which he doesn't annoy those who are praying next to him. If he is praying in congregation and causes annoyance to those praying beside him, then it is not recommended to keep the forearms away from the sides.
Regarding this issue, Al-Murdaawi said in his book called "Al-Insaaf" (one of the books that adopt the Hanbali school of Jurisprudence): 'This is conditioned to him not annoying the people praying next to him his neighbor but if he causes any annoyance, then he shouldn’t do that.'
He also said in his book called "Mataalib Ulin-Nuhaa" 'The Demands of the Men of Understanding' (also one of the books which adopt Hanbali school of Jurisprudence): 'It is permissible for him to do so if he doesn’t harm the person praying next to him, but in case he harms his neighbor (by this practice) he must stop it, and it is considered a forbidden act because of the harm it causes.'
Allaah Knows best.