[Bites the Dust] is first implanted into a person who knows Kira's identity.
In this case, Hayato.
If, anyone were to discover Kira's identity directly through Hayato (whether Hayato himself consciously does this is irrelevant), [Bites the Dust] activates and kills the person who uncovered it.
Then, time is reset (the amount of time reset is not specified but I assume it's to the start of the same day).
All events that have occurred before will occur again, and the person who discovered Kira's identity before will now die through natural causes.
When another person discovers Kira's identity through Hayato, the cycle repeats.
The only person aware of the multiple timelines is Hayato.
Not even Kira experiences the reset time (though since he understands his own abilities, he is able to deduce when a reset has happened).
If you're only up to Part IV then the number of arrows may be a bit spoilery:
Revealed in Part IV: 2 arrows (One was owned by Nijimura Keicho, taken away by RHCP, then sent to the Speedwagon Foundation. The other was used by Yoshihiro to awaken Bites the Dust.)
! Part III: Enya had an arrow.
Part V: Black Sabbath had an arrow (current whereabouts unknown), and so did Polnareff (later used to awaken Silver Chariot Requiem and Gold Experience Requiem)
Part VI: Jotaro gave Jolyne a locket that contained a shard of an arrow. We don't know where this came from.
If Jolyne's arrow shard is considered part of a separate arrow, then there are 6 arrows altogether.
! Diavolo found 6 arrows in Egypt. He kept one (the one Polpo had) and sold the remaining 5 to Enya.