In spoiler tags for you, read at your leisure sir
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She not only removed their arms, but their lower jaws as well. Its shaded in the show to keep that reveal for the premier of season 3. It is actually her boyfriend and father, and you are right it is indeed to mask her scent. It has worked phenomenally since she came up with it and Michonne is one of the biggest introductions of the comic. I only hope they do her justice.
Perfection is a lifelong pursuit requiring sacrifice. The only way to get it quicker is to sacrifice the most.