Argo CD adds a label and annotation to objects to denote that it is being managed by Argo CD, for example:
 
argocd.argoproj.io/instance: kyverno-acm
 
When using Argo CD to deploy policies to the hub cluster ACM copies these policies into local cluster folders and keeps the labels intact. Unfortunately this includes the Argo CD instance above which causes Argo CD to consider the application out-of-sync.
 
ACM should remove these labels when copying policies since ACM is managing the policy in the local cluster namespaces not Argo CD.
 
Tested in ACM 2.5 and 2.6.