There are two very common styles that I see implemented all over MusicBrainz for arrangements of video game music, for linking tracks to their source tunes. One approach is to mark a Recording as a “cover” recording of the original video game’s Work entity for that track; the other is to have a Work entity for the remixed/arranged track itself, and to then link the Work from the base video game to the Work for the arrangement, with an “arrangement of” or “based on” relationship.
I’ve seen editors walk through massive sets of Releases, converting the tracks back and forth from one style to the other, merging Works for arrangements into their base game Works and setting recordings as covers… As far as I know, Work-Work and Work-Recording relationships are both able to describe a lot of relevant relationships for crediting involved artists, such as Arranger (although Work-Work does have a few relationship credit types that Work-Recording doesn’t, like Lyricist)…
I’ve personally used both styles, though I tend to use Work-Work more often as I feel that it offers a way to more thoroughly describe certain credits, and also to recycle editor effort when tracks are re-released or re-arranged later down the line. I most often use the Work-Work method when working on Touhou doujin music circles (ex. Silver Forest, Sally, etc.), and then I frequently see use of the Work-Recording / Cover method for a lot of more mainstream VG Remix albums (ex. Harmony of a Hunter Returns, Balance and Ruin, etc.)
In fact, looking at Balance and Ruin, when they do need to credit a lyricist, they use the Work-Work method…!
EDIT: It’s also worth noting that, for a lot of Japanese-language doujin music, the artists themselves use the term “arrangement” for their releases. This is coming from Japanese speakers, not English speakers splitting hairs over what exactly, in technical terms, it means for something to be an “arrangement,” but still.
So, bottom line: Is there a community consensus on this? In my mind, as it stands, I think both approaches are acceptable, and do the job, based on the needs of the editor to add certain levels of detail in crediting/relationships, but it has always struck me as a very strange schism in style. I’m also a little bit biased since I’ve put a ton of effort into prettying up a lot of Releases using the Work-Work method, but I wouldn’t be asking if I wasn’t willing to follow the consensus and standards of the community.