As gone over in the discussion above [1], you can only compute those TMs that you can unroll into a fixed size circuit, which means (at most) only the subset of TMs that halt; doing this in the general case requires a halting oracle, which is not possible. That's not arbitrary computation by any reasonable definition.
Furthermore, it adds a huge constraint to programming: you can only implement loops with iterations bounded by a constant known at compile time. (And if you derive any of those constants from the inputs at the time you're compiling it for the FHE machine to execute, you've leaked information about said inputs.)