I don't have any background on this engine. So it may have been abused, and damage is not the result of poor quality. So I'm not faulting the manufacturer. It was purchased by a friend who wanted me to test it. It had a couple of scratches on the piston that I didn't like, and it didn't feel as loose as I thought it should. It didn't feel too bad, actually, so I was pretty disappointed when I popped off the backplate to inspect the insides.
One scenario is that the rod cracked first, and then the bearing spun. The oil holes in the bearing and the rod are rotated. And then, presumably as the engine kept running, perhaps screaming lean (or not), the bearing walked out of the rod on the cracked side towards the backplate. The backplate was really chewed, but it is surprising how much end clearance there must have been to start with. As far as why the rod might have cracked first, it might have been from a shaft run, or....? Heat may have been a factor, as the strength of aluminum falls off appreciable with temperature. I agree that this the kind of thing you see in R/C car engines, likely due to extreme rpm sometimes under no-load conditions, heat from a cowled application, and a really miniscule oil package in the fuel. I've seen the rod in a car engine split the length right up the centerline, which is an interesting failure mode.