any chain drive guys had issues with axle spacers mushrooming on edges? Specifically my insert that sits inside the bearing carrier and the spacer that sits next to it. I have single bearing carriers. Any input appreciated.

Check to besure they are tru and flat to each other some spacers just are net tru so when you tighten them up one side gets all the pressure

If the inserts are too long, sticking out of the bearing, this will happen, the inserts are thinner and can't take the compression, or maybe you just tighten them too tight!!