Sigh. Come on folks. Yes lots of this is speculation, but in theory educated speculation. Why won't folks be civil about it.
Squibs, if indeed you aren't referring to something different because you use the jargon different, don't guarantee nothing but an undercharged round. Some folks will use it to mean a primer only, no powder load. Some will use it to mean anything drastically undercharged so as to induce a malfunction or dangerous situation. You may well be talking past each other.
I know Maks is talking from pistol shooting experience. And yes, In the pistol shooting world, shooting out a squib does happen without rupturing the barrel. It is not usually done without harm. It'll ring the barrel usually. You'll see this come up a lot in the land of 1911s because the platform is designed to fire a 20k psi cartridge, and with modern metallurgy and because the platform was overbuilt to being with, it happily digests 35k psi .40 ammo all day and night. So in the world of bullseye where some of the shooters might as well be shooting air pistols based on muzzle velocity of their mouse fart loads, squibs do happen, and they do get shot out, and the pressure level isn't that high. In USPSA or IDPA it is more common that the more common faliur is BANG - bang- BANG-lockup, no obstruction. Where the squib lodged in the barrel and the shooter and RO didn't notice or catch it in time, and the bore is clear because the blockage was shot out. THe lockup usually occurs because the barrel is ringed. With a bull barrel 1911, it may not even really stop because you have so much steel at the point of the impact and the fitting is less picky than a bushing gun. Such internet trolls as the H&K engineering team designed the USP pistol and as part of the vetting of the design, they required it be able to shoot out a squib round and still function (yes, it damaged the barrel, but it would still feed and fire).
This is all different than a rifle round in a rifle. MUCH higher pressures there. But in this case we are talking about pistol cartridges in a carbine. When evaluating PCC for static steel, we chroned a bunch of carbines. Many of them shooting hot .38 super to drive comped pistols. These were generally hitting .357 magnum velocities out of 5" barrels. Out of 16" barrel they were hitting... the same velocities. Which was a surprising result, but the truth. By the time you are 14" down a 16" or 18" lever gun barrel, the pressures have dropped to WAY, WAY below the 35kpsi in the chamber at ignition. The shooter claimed to be shooting both .357 and .38 special. So we may be talking 17k at the chamber.
There are literally a BUNCH of ways this can happen based on teh pictures. And BTW the pictures look like the metal was thinnest at the cut for a particular groove of rifling So it split there cleanly. You can see similar thing with banana peeled barrels, you can also get rifle failures where you don't peel the barrel, but ring the barrel and split it at the stress risers where the lands and grooves meet. Sometimes those ring type bursts only breech one side because the button cut that groove a bit deeper. Pistol, rifle, regardless of cartridge, unless you have an overcharge seriously kabooming things, have a high tendency to split along the rifling. Which are fairly linear. From my experience, overcharges are what tend to cause random fracturing of gun bits. But that is pretty much at the action end of things for obvious reasons, and thus involves area where the stress risers likely aren't straightish lines.
So what do we know from the shooter?
They didn't notice any change in accuracy. If there were issue with the barrel, it could have shot like poop from second one. IF the shooter sucks, they may just not be accurate, or were using it at such close range you couldn't tell the difference between marginal shooter and "whoa that's not right". Lever guns are not the most accurate things.
They were shooting both .38 and .357 IIRC (since the initial post has been wiped I gotta rely on my memory). This can lead to things.
So what can we say? It didnt' blow up at the action. Thus it probably wasn't an overcharged round.
It is technically possible there was no obstruction. IMO for that to be feasible, there'd need to be a defect in the metal or something really messed up about the machining. But a crack forms at a stress riser at the dovetail cut from it barrel whipping or something, and it would crack along the cut and swell until pressure dropped enough. That might not happen until it hit the weakest land groove interface and then it tore up that.
I don't consider that high probability.
The other possibility is that there was an obstruction. There's LOTS of ways this could happen. Some of them REALLY non obvious.
1) Muzzle in the dirt or equivalent. Sure. Maybe. In a rifle cartridge definitely, but .357 and ESPECIALLY .38 special out of a lever gun, I'm doubting it unless there was also something wrong with the metal or something grievously out of whack with the machining.
2) Left a cleaning jag in there or similar. depengin on the way it went down and the chocie of tools, marginally more likely than sume dirt in the muzzle.
All the below are potentially assisted and or exacerbated by potentially bad metal, or by the fact that the dovetail cuts in the barrel often cause minor constrictions of the bore.
3) Squib round. Undercharged, leaves a bullet in the barrel. Full powered round. BLAMMO.
4) Mixing ammo. Lets say you were mixing lead 38 special and SJHP, SJSP, or JHP .357 with it. It headspaces off the rim. .38 is shorter and leaves a ring of soot and lead around the chamber mouth. Then the .357 gets the jacket stripped off it when this build up gets hefty enough. gets hung up at the binding you get from the dovetail cuts. The partial obstruction gets shot out as fragments when the barrel splits.
5) something like a SJSP gets peeled by the tight spot and repeat some form of the above.
6) shooting soft lead, and it scrapes a bit off at the binding near the dovetail cuts. repeat above scenario.
7) There's a crack or other defect that starts to bulge but not rupture. Something like really weak .38 special lead loads (maybe they bought some cowboy loads?) are barely trickling out the barrel to start and once bulged enough pressure drops and obstruction. Fire another round and it cracks but shoots out the obstruction or it goes flying once the barrel opens up.
etc.