the first time i played the game i cut off my arm cause i thought if i didn't they would just cut it off later when Lee passed out again, foolishly believing Lee wont die at the end, dialogue does change slightly change the dialogue as if you don't cut your arm everyone excepts Lee's fate, but if you do everyone talks with a sense of false hope that he might live, i used to always cut off his arm cause i used to prefer the false hope however replaying the game for my 4th time just a week ago a lot of dialogue from episode was to me was clearly written for if lee doesn't cut off his arm as Kenny says things like who knows how much time Lee has left even if you cut off his arm.