That pitting is not too bad. I've seen a lot worse go on for a long time.
However, if it were my bike, I'd change it. I would also very carefully inspect or change the gear that meshes with your damaged gear.
If that is the only pitting anywhere in the box, it could be a casting fault or maybe your gears were meshed in that specific place where the box has jammed etc. It's very hard to speculate.
Doesn't David Lambeth sell an alternative harder replacement 5th gear for these ??
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Did some trips.
Rode some bikes.
Fix them for a living.
Can't say anymore.
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