There is some significant wear on that spline. I don't knonw if Honda induction hardens this component--if it is hardened, this amount of wear could be most of the useful life of the spline.
I sketched a black outline into the image below to roughly showing what the spline was like when new. Perhaps 20% of each spline's material is worn away...but that may be most of the useful life.
The issue now is that there likley is a lot more slop in the interface, and as such, stresses go up during normal riding. So, it will wear faster and faster as it wears, IMO.
It is not surprising to see the rust colored paste in there--the metal will oxidize as it is worn away. This can be the case even if it is properly lubed with Moly 60. But I do suspect that moly 60 was not used on this spline.
IMO, if the mating splines on the pumpkin are similarly worn, then ride it many 10's of thousands as is (with proper lube of course). But if the mating splines on the pumpkin are in good shape, it seems to me it would be a good idea to replace this part (the one shown in the picture).
HTH.