It's not much help, but on my 10 ft lemon tree, a small percentage of baby lemons did this and I'd just pick them off. Didn't seem to foreshadow any problems, plenty of other healthy ones came and went. I always chalked 'em off as duds.

Not sure of the actual cause or level of concern though, sorry.

Perfectly normal. This is a very young tree in a small pot. I would expect it not to hold onto much fruit at all this year. Citrus will set far more fruit than they can support, then drop some to all, depending upon the age of the tree and conditions. Are you planning on planting this tree in the ground? If not, I would suggest transplanting it into a large pot, and one that is not black, with you being in AZ. Too much heat for the roots in your neck of the woods.

Patty S.