If the lug was inserted in the oil hole in the crankcase, this could lead to the bearing failing, because of lack of lubrication.
As the oilhole probably isn't a tight fit, for the lug, it will eventually break, because the bearing now has high friction and the shell will move and hammer the lug into on side of the hole and shear it.

Being inserted in the oilhole, makes it easy for the lug to move into the crancase and be sucked(or shot up as there isn't much room in the case) up on top of the piston.
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Poul
"If Life Gets Boring, Risk It!"
MC21SE, KISS box
MC21SP, HRC box, racing loom