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They take the cap off the rod and grind the cap and rod where they meet. This makes the big end of the rod a slightly smaller diameter. They then hone the rod to make the diameter correct and make it perfectly round again.
Your machine shop will know how to do it.
I would spend some time to figure why the bearing spun. I doubt they over-revved the motor (they have a rev limiter). You did not show all the bearings; but, I would expect oil starvation from low oil to show wear on all or most of the bearings. (Clevite has a good guide to read bearing wear.) I would suspect that it was a combination of piss poor maintenance, beating on the truck while it was cold.
I would check the piling system and put in a new oil pump.
Good luck. I have built 30-40 Chevys and Fords; but, never a BMW.
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