i asked him yesterday how the damage occurred, no answer as yet...
If you look at the break/ supposed cut in the other picture, you'll see that this this is a failure not a hack saw cut.
If it was nicked i don't think the guy would have taken the effort to cut around the seat stay bridge in a nice curve.
It's gone on the weld on both stays if you look closely.
i agree that the seatstay looks like a break, but that leads me to think it might have been cut only at the chainstay and then yanked causing the break. i don't know the frame so i can't be certain but it looks like the chainstay has 'gone' at what i would assume is its thickest part, doesn't seem right to me. also some of the spokes on the back wheel are bent as though something lodged within them (ie a lock) has been given a good yank.
actually, my apologies, having had another look it *could* have been a failure at the chainstay too. but even so, it's still outrageously dodgy...
Ala Carte Ti, Mantra, Attitude, ancient steel Trek