As a layman, a problem I also had with the oxygen hypothesis as permitting gigantism (before this toxic oxygen avoidance hypothesis) was that the largest arthropods today, as in the Paleozoic, were found in the waters, where oxygen is more diluted.
All primarily aquatic arthropods have gills which transfer oxygen to the blood (hemolymph). Unlike the air in tracheae, blood is actively transported, so size doesn't matter.
Indeed, don't spiders and scorpions reach bigger maximum sizes than insects nowadays? Their "book lungs" transfer oxygen to the blood, too.