Let us say that $F : \Bbb R → S^1$ is defined by,
$F(t) = exp(2πti) = cos(2πt) + isin(2πt)$
Say that I am given some open arc in $S^1$, defined by the set:
$C(x) = \{y ∈ S^1 | d(x, y) < 0.01\}$ , where $d(x, y) = |x-y|$ is your typical Eudclidean distance.
This seems to be smaller than a semi-circle, right?
What I do not get is how $F^{-1}(C)$ has a countably infinite number of open and disjoint intervals and that the restriction of $F$ to any of those open and disjoint intervals is a homeomorphism from the interval onto $C$. Is there some proof of this? Thanks!

First of all note that $F$ restricted to $[r, r+1)$ is a continuous bijection for any $r\in\mathbb{R}$. Which I leave as an exercise. Moreover $F$ restricted to $(r,r+1)$ is a homeomorphism onto image (being $S^1$ without a point). The inverse can be reconstructed from the complex argument.
Now fix a point $q\in S^1$. Assume that $C\subseteq S^1\backslash\{q\}$. This is your case due to "$<0.01$" condition. Also fix $p\in F^{-1}(q)$.
For any $k\in\mathbb{Z}$ let $G_k:(p+k,p+k+1)\to S^1\backslash\{q\}$ be given by $G_k(t)=F(t)$. So again it's a restriction. As I've mentioned earlier $G_k$ is a homeomorphism. Furthermore
$$F^{-1}(C)=\bigcup_{k\in\mathbb{Z}} G_k^{-1}(C)$$
Finally each $G_k^{-1}(C)$ has to be an interval when $C$ is connected. It has to be open when $C$ is. Both conditions are satisfied in your case. And $\{G_k^{-1}(C)\}_{k\in\mathbb{Z}}$ are pairwise disjoint by definition regardless of what $C$ is.
Can you fill all the missing details?