Quick update, I have had a chance to look further. The retaining fastners are NOT stripped or sheared in any way, see the picture. I can get a pick in the holes 1 1/4". In looking at the polished look of the end of the output shaft it looks as though they backed out slowly and the polished look is from the cup sliding on the splines as the play occured. I bet when the half shaft is removed they will be sitting inside the cup.
Also in feeling the lateral play (or lack there of) on the other side, I do think that an inspection would catch this, at least 1/2 of the way out or more.
In feeling the other side, I can tell that the only play in and out is a tiny bit of movement in which is the output shaft moving in the transaxle. The half shaft seems tight to the output shaft.