Answer
Groove wall yielding occurs when the axial stress $σ_a$ applied by the retaining ring exceeds the yield strength $σ_y$ of the housing or shaft material. This stress is $σ_a = \frac{P}{\pi \cdot D \cdot d}$. As the wall yields, it creates a 'ramp' effect. Under cyclic loading, the ring 'walks' up this ramp until it clears the groove. This is 'catastrophic' because there is often no warning before the component is released. In aluminum housings (e.g., 6061-T6), this is a common failure. The fix is to use a steel 'Groove Insert' or to increase the groove depth $d$ to lower the stress, provided the shaft can handle the increased $K_t$.