[Calahan]

If you have no valid slot for the Arena prize then you do not get anything other than the exp. (so no head slot means you do not get the Helm in CBM.1.92+)

If you already have an item in the slot required, then that item is magically transported to your lab (not tested what happens if there is no space in your lab), and the Arena prize replaces it. (this is the same mechanic as Wishing for items)