This behaviour is inconsistent from one machine to another. Running Visual Studio with elevated priviledges; and reinstalling K2 for Visual Studio components did not resolve the issue.
This is a known issue within K2 Blackpearl and is caused by the configured settings for this user in Windows. If the text/item size in the windows control panel is set to anything above the default of "Smaller," then this behavior will occur.
Set the text/item size in the Control Panel > Appearance and Personalization > Display (Smaller/Medium/Large). If the radio button options do not appear, make sure you have selected the checkbox: "Let me choose one scaling level for all my displays".
When using the Medium (125%), Larger (150%) and Extra Large (200%) settings (where available), the arrow disappears. Set it to Smaller, then sign out and back in to the machine to apply the change.
Relaunch K2 Designer for Visual Studio and the arrow should reappear in the K2 Object Browser.