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The giant octopus makes up to four Strikes with different arms, each against a different target. Each attack counts separately for the octopus's multiple attack penalty, but the penalty doesn't increase the penalty until the octopus has made all the attacks.
My question pertains to the second sentence. I'm assuming "the penalty doesn't increase the penalty" is a typo, and the sentence is meant to read "the penalty doesn't increase until the octopus has made all the attacks." If read thus, does that mean that none of those four arm attacks takes a penalty to the attack roll? And if the giant octopus uses its final action to make a standard arm attack, then the -5 penalty would be applied to that attack roll?