Engine Failure: Camshaft and Piston damage - Rebuild in progress

Hi all,
Hopefully Hello @Tamir as well, the one with the knowledge and kindness to reply the majority of threads!

My bike went in to mechanic for a new battery and fork seal maintenance as the right side was leaking.
Attached is the quote I got afterwards.

I noticed the black plastic (Can be seen on video, it's the black plastic round thing) is damaged, drove the bike home (5km) and there was a hard "klunk" sound on the front sprocket.

• Drove slowly home after the sound and there is a definite something gripping or slipping whilst the shaft is turning.
• Got stuck in second gear, after a kilometer or so my gears came loose again and was able to shift up to third and then back to 2nd and 1st. Now able to shift through them whilst testing parked.
• I parked the bike and left town for a week.
• Returned back to bike shop and showed them the attached video, they said bike needs to be loaded on trailer and brought in to shop.
• Removed the front sprocket guard and took video, all teeth seem fine no chips or breaks.

My Question:
1. Redacted*

2. What is the possible cause to this issue?

3. Is it possibly just a loose sprocket?

Thank you for the time you take to read and respond to my issue.
Exmoz greatly appreciates your input!

Video: