Liverpool signing Davies is different though. That's not panic really, it's actually a pretty sensible deal (in theory). They need a centre half in the short term but not the long term. They sign a lad who is nearly out of contract for a low fee, he offers cover or plays for the next couple of months, and is maybe kept on as cover next year. Then he's sold on at a massive profit as instead of being a Championship defender he's now got CL experience and Liverpool on his CV and someone is willing to pay £10m for him. Hopefully it doesn't work out and he scores 3 own goals in the derby, but i'd say as a move it's almost the exact opposite of a panic buy.
I am going 2 ways on hom mate. His transfermakt value is 2m which is generally a good indicator. His wider performances and numbers suggest an average (at best) championship defender. In theory they can move him on, but given his age (nearly 26) and in 18 months he will be (no sh1t sherlock) 27 I'm not sure people will be cuing up to buy him. The key will probably be what wages they offer him. If they are low enough, they can probably sell back to the championship for a moderate profit.
I'll be honest, Mustafi made a lot more sense for them to me. He's been terrible for Arsenal, but at one point someone paid 35m for him, and he has in the past delivered in La Liga and the CL. For 6 months, he'd have given them cover and they could have moved on.
The wider point with Davies though, is people panic and go a long way down their list- and that recruitment by numbers is also not an exact science.
If it's not a panic buy, I would ask, why is it being done on the last day of the window, when they made clear they didn't want to sign anybody?