Clearly looks like a bearing failure. Once they start to go, they can go quick. I lost a front wheel bearing on my C10, and in just 30 miles, it almost competely ate the ball bearings. Since then, I pull the seals on all new bearings and repack them with synthetic grease before installation.
If it were me, I would be replacing the right swing arm too. It's probably just the paint burnt off, but given how warm it got, I'm not sure I would trust it.
Unfortunately for MGvaleri, Kawi doesn't even cover bearing failures under warranty. Given his bike is out of warranty, he's probably stuck with the bill.
So how many miles (kilometers) were on these bearings?