It looks like the sleeve/bushing eliminated the key fit between the shaft and the pulley and relied only on the set screw to transmit power?
Notice the round set screw indent on the shaft at about the 3 o'clock position relative to its keyway. Also the hole thru the sleeve/bushing and the obvious spin damage from a loose set screw.
The McMaster Carr link for these indicates they are for low torque applications and indeed show a hole thru the sleeve for a set screw.
https://www.mcmaster.com/6420k25
Not sure how long it ran like that but maybe flip it end for end and drill a new set screw hole in a clean area and try again. Or get a new pulley of proper shaft diameter. Or slot the bushing to retain use of a key?