bear
I think you are incorrect in your suppositions, which do not seem to be shared by anyone else.
The 'cove' at the bottom of the incorrect counterbore is the runout radius of the counterbore tool. Radius at this position is essential to avoid a stress concentration factor. Careful design would never tolerate a sharp corner .
The 'bias' in the tooling marks is caused by the feeding in of the tool. It is a shallow angle helix determined by the feed rate of the cutter.
We are all ignorant as to the design surrounding this failed part, but it is probably the female element of an O ring seal. As such, gross frettage of the nature which you assume is unlikely.
Time to move on.