The code outputs `3`. The `arguments` object in JavaScript functions reflects the number of arguments actually passed to the function, regardless of default parameters. In this case, three arguments were passed to the function: 5, undefined, and 10. Even though the second argument is `undefined` (which triggers the default parameter), it still counts as a passed argument in the `arguments` object. This is an important distinction—default parameters affect the values the parameters receive, but they don't change what's stored in the `arguments` object. Note that `arguments` doesn't reflect the final parameter values after defaults are applied; it only contains what was explicitly passed. Also be aware that arrow functions don't have their own `arguments` object, so this behavior applies only to functions defined with the `function` keyword. This distinction can be important when refactoring code that relies on examining the `arguments` object.