The dowel screw in the middle of the handle broke first and then the wood around it went. I've seen cues do this before, even high end cues.
The Dowel Screw might have had imperfections in how it was heat treated , or in this case if any heat treating of the part was ever done.
Had a Scruggs cue fail like the above and heard stories about a Bushka failing the same way once. Be glad you got some of your money back and that the company was still around. The ones I have seen fail didn't have someone to fall back on for any reimbursement.