Riding (especially with a loved one) with a flaked transmission was foolish. Stuff like that can and has LOCKED UP while underway. Inconvenient in a car/truck, can be deadly on a bike. Glad you, your wife and your checkbook came away unscathed.
That exact thing happened a couple years after the Yamaha roadstar hit the streets. Then, it was the biggest displacement bike. A couple granny's locked up because of cheap compromised washers and Yamaha had a massive recall.