The Arc Reshape tool allows you to reposition the Bezier Points on the side of a path (polygon or line segment) so that the side bows outward or inward. Drag your finger nearer or farther from the midpoint of the side to increase or decrease the amount of bowing and to switch the side of the bowing. At the midpoint itself the bowing will appear to be a half circle. See also the Reshape Side tool for more ways to reshape the Bezier Points on a side.
Example: