S&W says it’s not their fault or problem and maybe they’re correct but after seeing the picture and hearing their response I’d never feel confident buying one. If this happened to a Ruger I bet the response would have been very different.
Carbonyl I am a big Ruger fan, but I would not expect them to replace a pistol damaged by improper ammunition, any more than I would expect S&W to replace this one.
Yes, for the OP it is a bad situation, but that does not mean someone else must make this right under the circumstances. S&W is not responsible, unless they are lying about their testing. We have no reason to believe that. Federal may or may not be responsible, or maybe they have already taken steps to make this right at some time in the distant past; or the ammo may have been tampered with at the selling dealer's facility; or a variety of other scenarios are possible. Until Federal is contacted we do not have enough info to draw any conclusions IMO. We certainly don't have enough info to condemn S&W or Federal at this point.