Exactly, if you pulled a bullet from one of those rounds (IF they are truly factory Fed AE .223), they use a carefully chosen canister grade powder with a high load density. Even a full case of the factory powder would not bring pressures to OVER proof load area as this case is showing.
I've reloaded for over 35 years, started on my grandpa's kitchen table with a hammer and a LEE .38 special hand die, I was about 10 years old and he let me beat the primers in. I learned to load bottleneck cases with my dad's Lyman nutcracker type .222 REM loader. I've made some really stupid mistakes, esp. with pistol powders, and blown some stuff up. I loaded 20-30K a year back when I shot a lot of pistol. In the military and as a civvy contractor I've seen M16's with 3 bullets lodged in the barrel, cleaning rods, sticks, etc. But I have only seen a case head like that twice. Especially with the other damage signs on the firearm.
That's why I still believe that cartridge fired SOMEHOW with a gross headspace issue. Maybe .010 to .020" or so.
I wish he could get that measurement I requested. It may not be definitive, but would answer the question in my mind, anyway.
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