Why is that bad? Not only it's common business practice (the more you buy from us, the cheaper we sell), it also makes sense from the support perspective. Support the integration between their cores and a different GPU would be more work for them than integration of their cores with their own GPUs.
That's why companies expand to adjacent markets: efficiency.
A completely different thing would be to say: "if you want our latest AXX core, you have to buy our latest Mali GPU". That's bundling, and that's illegal.
Microsoft have away a free browser with their operating system - leaving little room for other browser vendors to serve that market.
Each ARM design deal including a GPU for cheap leaves little room for other GPU vendors.
There are three possibilities here: ARM's design is approximately the same as the competitory, ARM's design is inferior to the competitor, and ARM's design is superior to the competitor.
If faced with two equivalent products, staying with the same supplier for both is best (especially in this case where the IP isn't supply-limited). The discount means a reduction in costs to make the device. Instead of ARM making a larger profit, their customers keep more of their money. In turn, the super-competitive smartphone market means those savings will directly go to customers.
In cases where ARM's design is superior, why would they bundle? If they did, getting a superior product at an even lower price once again just means less money going to the big corporation and more money that stays in the consumer's pocket.
The final case is where ARM has an inferior design. I want to sell the most performance/features for the price so I can sell more phones. I have 2 choices: slight discount on the CPU but bundled with an inferior GPU or full price for the CPU and full price for a superior GPU. The first option lowers phone price. The second option offers better features and performance. For the high-end market, I'm definitely not going with the discount because peak performance reigns supreme. In the lesser markets, its a calculation of price for total performance and the risk that consumers might prefer an extra few FPS for the cost of another few dollars.
Finally, there are a couple small players like Vivante or Imagination Technologies, but the remaining competitors in the space (Intel, AMD, Nvidia, Qualcomm, Samsung, etc) aren't going to be driven under by bundle deals, so bundling seems to be pretty much all upside for consumers who stand to save money as a result.
It is actually the other way around. ARM is more like giving the Mali GPU for free ( or at a very low cost ) if you use their CPU.
>Also this caused obvious problems for IMGtec
Yes, part of the reason why PowerVR couldn't get more traction and Apple were unhappy with their GPU pricing.
What would be an issue would be if Arm used their market power in CPUs to try to control the GPU market - e.g. you can't have the latest CPU unless you buy a Mali GPU with it.