Welp, that’s a gooder! I’d do everything but drill it out just so you won’t introduce more metal into the system. I think the centers are open so you may be able to tap with a brass drift. You may be able to drive the stub inward to free it up. It probably just has metal particles in the splines. How do the bearing surfaces look on the axle? The splined end looks like it’s been rattling around for a while.