Answer
Groove wall yielding occurs when the axial thrust load $P$ exceeds the compressive yield strength of the housing material. This is common when using steel retaining rings in aluminum or plastic housings. The localized stress at the contact point is $\sigma_c = \frac{P}{A_{contact}}$. If $\sigma_c > \sigma_{y,housing}$, the material deforms plastically, creating a ramp-like profile in the groove. Once the groove is deformed, the ring loses its perpendicular support and will eventually 'pop out'. In failure analysis, this is identified by the presence of a 'rolled-over' groove edge. To fix this, engineers must either increase the groove depth $d$, use a harder housing material, or use a 'Groove Guard' or a thicker ring to distribute the load over a larger area.