Spinning Lug nut and stud
Definitely not right clean everything up check your bearings after they are clean.
They should move freely no snagging there should be no burn marks and no pitting on the bearing or the races.
Only thing i can tell from pic is one of two things happened the bearing was put on to tight or it wasnt greased enough most trailer recommend greasing the axles every 3k cheaper ones more often.
Do it better than the last Guy!