Here is what I believe happened:
The flange broke off the back of the sprocket that goes on the crankshaft and holds the primary gear.
https://imgur.com/SXPtibUThis flange holds the crankshaft securely into the right side ball bearing, and prevents the crank from moving sideways. Once this flange broke off, the crankshaft could move to the left side.....as evidenced by the primary gear rubbing on the case. When the crankshaft moved to the left, at some point the right side of the crankshaft counterweight started to hit the counterbalancer shaft (ticking noise)....and at some point it wacked the counterbalancer hard enough to break the case and push the counterbalancer shaft forward and when the gears lost mesh the timing was lost.....and then a mighty wack knocked the front of the engine out and onto the pavement!
I believe this photo shows the point at which the crankshaft counterweight began to contact the counterbalancer....the mark on the rod likely occurred once the gears separated and the timing was lost.
https://imgur.com/vgNFuh4I believe the damage to the counterbalancer pin likely occurred as the crankshaft hit the counterbalancer - I don't believe it was the cause of the failure.
Why the flange broke on the crankshaft sprocket.....I don't know. Perhaps it was not torqued properly. Perhaps it was damaged when the shop tried to remove it (Isn't the nut a left hand thread? Perhaps they shop got it overly tightened by trying to remove the nut the wrong way). It could be the shop caused this failure - I have no idea how you can prove it to them at this point.
NOTE: Don't pay any attention to one side of the crankshaft looking discolored while the other half is not - they are all that way. Evidently some heat treating process at the factory causes that - several of us have been fooled the first time we see that funny color on half the crank.