I was fleet mechanic for 30 years and I repacked hundreds and hundreds of wheel bearings. So many that I now hate to do repack wheel bearings more than anything other job on a car. I'm not fond of doing brakes either. That bearing should have slid on there easily, but I don't think it will hurt anything. It's possible that at some time in its life it had a bearing seize up and spin on the spindle. The question becomes did the spindle get hot enough to change it metallurgy. If the spindle is blue or discolored from heat I'd replace it. The bearing could have been machined wrong, but I've never come across that. They are usually accurate to .0001", 1/10,000th an inch. It would be interesting to swap bearings between sides to see if the problem follows the bearing or if it's the spindle.
When I replace or repack wheel bearings, I clean all the parts to remove any old grease so there is no chance of different types of grease contaminating each other. Pack the wheel bearings until grease comes out the outer rollers. Smear extra grease all around the outside of the bearings. Put a light coating on the spindle. Put a little on the new seal so it doesn't start off running dry. I coat the inside of the hub which helps prevent rust in there from any moisture that might get in there. You don't want to fill the hub up with grease because that cavity helps dissipate the heat from the bearings, at least that is what I was told. Put the drum or rotor on and wipe-off any grease from the bearing surface where the washer will fit up against it. A layer of grease might eventually work its way out and loosen the adjustment a little. I always keep the washer, nut and the spot the washer goes against grease free. Put the nut on and tighten it up fairly snug with a crescent wrench. Rotate the bearing back and forth a lot to work the excess grease out. Loosen the nut and then tighten it with your greasy fingers so you can't over tighten it. Pull the wheel towards you and push it away from you, that's called "axial play". There should be no axial play but no tighten than that. You can loosen it until you feel some play and then tighten until the play is just gone. Put the cotter pin in and drive it for a while. I used to find that on the next six-month service the bearings would have slightly loosened, probably from a little excessive grease being forced out. I usually tighten them up one more cotter pin hole until the play was just gone again. The they were good for 30K miles. We repacked wheel bearings every 30K miles, and we never lost wheel bearings. million and millions of miles on a 400-vehicle phone company fleet. They kept their vehicles for over 15-years and up to 300K miles and they still had their original wheel bearings. I contribute that to using the red Lubrication Engineers grease, good stuff. To answer your question about the bearings needing to move in and out the answer is no, if the wheel bearings are adjusted properly, the bearings cannot move. Bearings that run-in gear oil can have preload on them but bearings with wheel bearing grease will eventually overheat and turn blue if there is any preload, over tightening them forces all the grease out and eventually the bearing and race will be running metal on metal.
Just tonight there was a news story about a pickup losing a wheel and the
spectacular crash it caused. If you freeze frame the wheel you can see it still has its brake rotor bolted to it and it looks like the spindle is in the rotor, I'm thinking the spindle broke. I've never seen a spindle break in my 30-years as a fleet mechanic. That's usually reserved for monster truck jumping.
https://www.youtube.com/watch?v=v4qfWknMJMA
