If you’re just catching the first few episodes of Arrested Development: Yeah, you saw what you think you saw. Yeah, it’s a gag. No, you’re not the only one that it confused.
Arrested Development is all about the inside jokes. It’s part of what makes it great, and so fun to rewatch. It’s meta jokes all the way down. This time, though, the writers went a lil’ too deep down the rabbit hole for some of the folks back at home.
You see, that watermark only shows up in very specific scenes: the flashbacks. Whenever they needed to use clips from the first 3 seasons, up pops the watermark. Get it? Ehhhhhhh?
Still not gettin’ it? Fine, fine, I’ll be that guy: they’re joking that they couldn’t get the raw footage from the original seasons, so they had to use a screen-capture/video downloader program to rip it. Many of these apps will let you capture video for free, but will embed a big ol’ watermark on everything you rip until you cough up a few bucks. Add in the fact that Arrested Development wasn’t originally Netflix’s show to produce, and the joke starts to take on all sorts of clever little layers.