All good questions Mr TC. You’re right, the nut doesn’t actually back off.
The first issue is the plain steel spacers. They actually could be just exhaust pipe. Replacing them with hardened spacers is a great idea. I wish the replacement, hardened spacers available were thicker. It would be a big help.
The second issue is the folding tab, lock washer. They are soft and can distort/fret leaving less/no tension on the nut.
The third issue is that the spindle/axle is not made of sufficiently strong material. They didn’t actually use high-grade butter, though it seems like it at times. Any looseness and the splines on the axle and hub will both wear away quickly.
The fourth issue is the design of the axle/ spindle itself. The threaded section ends with no rounded, stress-relieving to the rest of the axle. This is a natural fracture point. Any over-tightening or stress from a loose hub and it may fracture.
Finally, the upright itself is soft and very thin. If you drive out the bearings crooked, commonly done, the bores wear/fret until they no longer hold the bearings properly. This leads to movement, play, stress and failure.
What to do?
Careful examination and selection of the components is very important. Use only hardened spacers. The hub should be “snug” on the splines. Any play and you need to replace BOTH. The bearings are a press fit into the hub bores. That means tight! If they go in easily, you need to have the uprights repaired with steel sleeves shrunk into place. Finally, if all of the above is good, use loctite designed for splines on the axle and hub. This is extremely important otherwise you will get movement and wear.
The lock tab washer? AFAIK, there aren’t any correct ones out there. It needs to be designed so the nut only bears on hardened material. Unfortunately even the good ones have the nut working through the soft tab part of the washer. If everything else is up to snuff, the lock tab washer will be ok. But, if anything else is marginal, it will fail as well.
It is what it is. Perfectly fine for a 50 hp Imp. Quite a bit less so for the more powerful Europa with its reduced spline contact.