Having spent the duration of the video thinking about it, it occurs to me that as long as the bearings are within the races, the end float is irrelevant, though that does seem excessive. What is important here is the spacing of all the bits, and what has happened seems to be that the spacing erred to the outside far enough for one or two friction plates to come out of the grooves and catch the outside of the drum, thus thrusting the pinion out through the case.
As a side note, I don't recall that style steering clutch needing any play in the flanges to remove, if they're in good order the whole clutch pack should slip in the grooves thus making the clutch unit a good bit narrower and you can pull it all out. Somebody correct me gently if I'm wrong?
