Question......... Was it like that when it was first filled with oil after the rebuild?
I can see no other way that damage like that can occur when the dipstick is in the hole
No.
When I checked the oil level after the first 20 miles (admittedly in the dark with an LED torch) I do remember seeing some vertical scratches at the bottom, in the same area - in hindsight something had started to happen. But it wasn't serious enough to ring alarm bells, considering all the other stuff you have your mind on during the first hours of running a rebuilt engine.
As you can see on the photo above, after 180 miles the bottom inch of the stick has been completely shredded, to the extent that the word 'MIN' is illegible.
Most of this damage has happened sometime in the last 160 miles.
When you say "no other way that damage like that can occur", do you mean it must have been caused by gears?
This afternoon I drained the oil and topped up with exactly 4.7 litres of fresh oil, just to confirm to myself that the MAX mark on this dipstick is in fact correct (which it is - spot on).
As a temporary measure I've used a hacksaw to take the bottom inch of the dipstick off, as I obviously don't want to be running the engine with gears grating against a dipstick.
I'll be buying a new dipstick next week and keeping a very close eye on it to see if that gets damaged too.