I can not wait to see more responses to this one!!! My daughter is 22 months and I still have to swaddle her or she refuses to sleep. I do not wrap up her arms though and only do her body and legs in the burrito wrap and have been doing it this way since she began to wiggle around right before she began to flip over! She still to this day sleeps 12 hours every night and takes awesome naps.... I really feel it is because I do still wrap her up and helps her to still feel secure.
I would do it slowly if you are going to transition her to no swaddling at all. Remove one arm for awhile, then the next and then loosen the body until you no longer have her swaddled at all..... BUT- really what do I know since I havent tried that yet myself! lol
Good luck and I am going to keep checking back for your advice since we are on the last blanket that fits her and that one is about to be shredded I am sure- I can completely see through her blanket!
Many blessings to you and yours!