I don't see anything in the OP's pics that looks alarming in the least.
The portion of the lug that has been rounded is not important to lockup. The lockup is only depending on the flat edge of the lug facing the camera. As long as that isn't being deformed and as long as the gun cycles, there isn't any cause for concern as far as safety goes.
The wear on the bottom of the barrel is where the barrel bears against the support area of the locking block and also isn't a cause for concern.
I'd keep shooting it. I can't see a reason not to.
You can use a light grease on the worn areas and on the interface between the locking block and the barrel "tooth" to cut down on wear in the future.
Dont get me wrong, but I posted to several forums asking what everybody else thought of it, and got no such replies as yours. If I had, I might have felt comfortable telling the "gunsmith" to go pound sand. It would have saved my 35 bucks, and lots of typing, and lots pf phone calls. Oh well. Since you are a staff member please feel free to delete this thread if you wish. Thank you.