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You have a 1954 Spiegel Brooklure, Gale model 12D11. And I can tell you what caused that damage. Water has somehow gotten into the crankcase and caused rusting of the crankshaft, under the rod. The rod is silver plated, and the silver is the bearing. When you started it up, the rust particles scraped and scratched away at the silver plating, which destroyed it. Then the resulting heat buildup melted the aluminum rod and that’s all she wrote. You see the results. Most people will be quick to blame it on the oil. It wasn’t the oil, it was the water.
I speak of authority because I’ve seen it many times. The water usually gets in through the lower main bearing seal, but your ’54 doesn’t have one and doesn’t need one. So, where did the water get in? My best guess is the exhaust cover gaskets or a pin hole through the baffle plate. You certainly need to inspect it.
Believe it or not, that melted aluminum can usually be sanded off the crank.