The way an arterial line works is you pop something akin to a normal IV line in an artery, and connect that to a transducer that measures the blood pressure. You can then use it as an easy way to access blood for blood tests (especially good for when you want to check the blood oxygen and carbon dioxide).
Because arteries have a higher pressure behind them than veins, you need something to provide a bit of back pressure (otherwise the patient will just bleed out the line). So you connect them via a "3 way tap" to a bag of saline that is kept under enough pressure to stop the arterial line from bleeding.
The lines all screw together, and sometimes they can become a little loose. Some of the saline (under pressure) has leaked out, and because that's resulted in a loss of back pressure against the artery, some blood has also come out.
You can usually see on the monitoring that something isn't quite right when the pressure waveform looks "dampened" or kinda low/flat. First thing you do is check the patient and their lines.